Global Economic Review
The year 2022 was marked by challenges such as geopolitical tensions in Eastern Europe,
inflationary world, high interest rates, energy costs and resurgence of COVID-19 cases in
China. These factors weighed heavily on the economic growth trajectory in 2022, and are
expected to continue doing so in 2023 as well.
The global growth in 2022 is estimated to have slowed down to 3.4% compared to 6.2% in
2021. The emerging markets and developing economies grew at an average rate of 4% in 2022
compared to 6.7% in 2021. The biggest contributors to the growth were Saudi Arabia and
India, which have grown at 8.7% and 7.2%, respectively, in 2022. On the other hand, the
advanced economies have grown at 2.7% in 2022 compared to 5.4% in 2021. The biggest
contributors to the growth in advanced economies were Italy, Spain and UK, growing at
3.7%, 5.5% and 4.0%, respectively, in 2022.
With the escalation of geopolitical tensions, the world has seen the resurgence of
supply chain disruptions owing to less-than-normal trade at the global level. Further,
prices of gas, fuel and food have increased dramatically resulting in
higher-than-anticipated inflation. The global consumer prices in 2022 stood at 8.8%
compared to 4.7% in 2021. Of this, the inflation for emerging economies and advanced
economies stood at 9.8% and 7.3%, respectively, in 2022, compared to 3.1% and 5.9%,
respectively, in 2021.
The Union Budget 2023-24 speaks volumes about the Governmentspressuresacross the
increasing focus on infrastructure, financing new businesses, and making India more
self-reliant and self-employed.
However, with the focus of governments across the world on securing global
disinflation, of COVID-19, ensuring financial stability and restoring debt stability, the
world is expected to stabilise in 2024. The International Monetary Fund (IMF) has
projected global growth to decline from 3.4% in 2022 to 2.8% in 2023 and rise to 3.0% in
2024. The policy initiatives are expected to stabilise the global economy in the long run,
and successfully reduce global inflation to 6.6% in 2023 and further to 4.3% in 2024.
Indian Economic Review
The inflationary the Indian economy as well. However, India clocked a GDP growth of
7.2% in FY 2022-23 as against 9.1% growth attained in FY 2021-22. The Consumer Price Index
(CPI) of India is estimated at 6.8% in 2022-23 compared to 5.5% in 2021-22. The target
range for inflation was fixed at with an upper tolerance of 6%. However, between April and
October 2022, the CPI was outside the target range set by the Centre. To bring inflation
under control, the Reserve
Bank of India (RBI) increased the policy repo rate under the liquidity adjustment
facility (LAF) by 225 basis points from 4.0% to 6.25% between May and December 2022.
Additionally, the Government cut down import duty on major inputs such as ferronickel, and
coking coal, among others, to zero; rolled out phase-wise reduction in excise duty of
petrol and diesel; waived off customs duties on cotton; prohibited export of wheat.
With the increasing thrust of Government on infrastructure and capital expansion, the
country is poised for sustained growth in the foreseeable future. The Union Budget 2023-24
speaks volumes about the Governments increasing focus on infrastructure, financing new
businesses, and making India more self-reliant and self-employed. The IMF projects the
Indian economy to grow at 5.9% in FY 2023-24 before rising to 6.3% in FY 2024-25.
Global Automotive Industry
The global automotive sector is one of the biggest contributors to the global
manufacturing sector, and a significant contributor to the global economy. The global
automotive industry is predicted to continue growing at a CAGR of 3.71% (between 2020 and
2030) reaching 110 Million units by the end of the decade. With the onset of the COVID-19
pandemic, the automotive sector had been facing several challenges such as uncertainty in
supply chains, geopolitical tensions, high energy costs, re-occurrence of COVID-19 in
major auto markets and slow recovery in semi-conductor availability resulting in longer
waiting time for vehicle delivery across the world. The total global light vehicle sales
during the year 2022 stood at 80 Million [79 Million units in the year 2021] which is
expected to reach 84 Million in the year 2023.
The ongoing challenges are expected to phase out eventually in the near future with the
world heading towards supply chain normalisation and increasing number of economies
embarking on manufacturing their own semi-conductors
The Indian automotive sector is one of the biggest contributors to the global
automotive sector and is the fifth in the world. The sector contributes 49% to the
manufacturing GDP of the country, and accounts for 7.1% of Indias total GDP. rather than
depending on imports. OEMs are working towards efficient ICE/Hybrid/Plug in Hybrid/Mild
Hybrid/Fuel cells powered vehicles expected to drive the growth in the automotive sector
in the foreseeable future.
Indian automotive industry
The Indian automotive sector is one of the biggest contributors to the global
automotive sector and is the fifth in the world. The sector contributes 49% to the
manufacturing GDP of the country, and accounts for 7.1% of Indias total GDP. The sector
can be categorised into passenger vehicles, commercial vehicles, and two-wheelers. Among
these categories, the biggest contribution to unit of sales is two wheelers and passenger
vehicles, accounting for 81% and 13% of total unit sales, respectively.
4W – Domestic automotive sales trend
The total sales of four wheelers in India stood at 4.7 Million in FY2023, clocking a
y-o-y growth of 23.7%. With the big thrust in capex in the Union Budget for FY2024 and the
normalisation of supply chain (especially improving supplies of semiconductors) post the
COVID-19 disruption, the country is expected to see a strong growth momentum with
4-wheeler sales growing at 6-8% by FY2024. The industry experts forecast that the volumes
would reach 5.5 to 6.5
Million by FY2027. The effects of the pandemic are gradually dissipating and leading to
a rebound in GDP and private consumption. The stricter safety and emission regulations in
the domestic auto market would benefit customers while opening new opportunities for
automotive companies.
(Source: IHS Markit, Markline, SIAM, Internal Study)
4W - Automotive actuators market
With the automotive sector undergoing continuous innovation, modern cars are equipped
with >100 motors per car on average, which controls functions in: Engine air management
systems viz., ETC, EGR, VTG, WGA, GPA
Braking Systems viz., Electric Parking Brake, Park Lock Actuator, Electric Vacuum Pump
Body Systems viz., Window Lift Drive, Trunk Opening and Closing Device, power door, wiper
system, washer pump, door latches, side view mirror Seating Systems viz., lumbar support,
seat adjustment, seat drive and head rest Lighting Systems viz., headlight positioning
Interior Systems viz., HVAC cooling systems for ICE and battery banks
The global automotive sector is seeing a constant influx of funds, which is
spearheading innovation, and powering the key trends in the sector such as efficient
ICE/Hybrid/Plug in hybrid/Mild Hybrid/Fuel cells powered vehicles, electrification of
powertrains, and connected vehicles, among others.
Based on Global OEMs and customer interactions, efficient
ICE and Hybrid systems would continue to power majority of 4W powertrains in the next
decade despite penetration of BEV in select geographies. The industry experts opine that
global auto industry will witness consolidation at Tier-1 and Tier-2 players in ICE
segment. Igarashi strategy is to remain a leading Global player in the TAM segment to meet
the growing demand for Actuator motors in ICE and Hybrid Systems.
This drives the use of automotive actuators by prominent brands, thereby implying that
the industry has a multitude of prospects in the foreseeable future. The global automotive
actuators market stood at US$ 24.57 Billion in 2020 and is projected to reach US$ 42.06
Billion by 2028, growing at a CAGR of 6.91% between 2021 and 2028.
‘Minus China Strategy
Owing to increasing geopolitical tensions, real estate and labour crisis in China,
supply chain disruptions and spiralling cost escalation, leading Tier-1 companies have
initiated shifting their sourcing and manufacturing activities out of China to India.
Favourable policy reforms such as Production Linked Incentive, Make in India, and FAME-II
are increasing attractivess of India as a preferred manufacturing destination. A few
global Tier-1 customers of Igarashi Group have shown interest to shift sourcing to India
on their new programmes in Electric Parking Brake (EPB) and Trunk Opening and Closing
Device (TOCD). Your Companys parent company viz., Igarashi Electric Works Limited, Japan
(Igarashi, Japan) has been playing a key role in supporting global customers to re-source
from India commencing from FY2025.
Indian 4W – Actuators market
The Indian 4W actuators market expanded with the introduction of BS-VI norms, paving
the way for ETC, EGR, WGA and VTG. According to the industry experts, the Indian
automotive actuators (ETC, VTG, EGR, WGA, fuel-pump) market stood at 6.8 Million in 2021
and is estimated to reach 14 to 16 Million by 2026, growing at a CAGR of 15% to 18%
between 2022 and 2026. The Indian actuator market (Engine air management) is dominated by
key market players such as Bosch, Denso, Mikuni, KSPG, Dellorto, PVNA & Turbo energy.
Your Company is working with all these leading market players to increase current market
share from 42% to 60%.
Electric motor growth platforms
Broad-banding of Actuator Motor applications - 4W
Your Companys global track record built over the past two decades paved the way for
further strengthening lead position in 4W global Actuator market. Your Company has been
undertaking consistent efforts in broad-banding actuator applications besides air
management (ETC, EGR, VTG) to Braking application [EPB, EVP and PLA] and Vehicle Body
applications [TOCD]. All these motors are technology-agnostic products being used in ICE,
Hybrid and BEV car segments.
For Engine Air Management, our development team is working on 25 programs with leading
12 Tier-1 customers (global as well as domestic) with potential volume of 20 Million
motors in next 4~5 years.
For Braking and Body systems, our development team is currently working on over 15 new
application programs with leading ten Tier-1 customers (global / domestic) with potential
volume of 35 Million motors in next 4~5 years.
Electric Parking Brake (EPB)
The traditional mechanically-operated handbrake through wire is on the verge of coming
to an end. In modern cars, the traditional handbrake is replaced with an electric parking
brake, which is an electronically-controlled parking brake and has an actuator (motor)
mounted directly on the rear brake caliper (Ref. Fig.1), and is activated by pressing a
switch in the interior of the car. Our development team is working on 7 programs with
leading five Tier-1 customers (global / domestic) with potential volume of 6 Million
motors in next 4~5 years. The commercial launch is slated for FY2025 with two Tier-1
customers.
Park Lock Actuators (PLA)
PLAs are fitted either to Internal Combustion Engine (ICE) vehicles with automatic
transmission or to Electric Vehicle (EV). Park lock actuators (Refer Fig. 2) are being
operated electro-mechanically or electro-hydraulically to secure the vehicle against
rolling away from parking (includes Hill Assist mode as well) and to ensure theft
protection. Our development team is working on 3 programmes with leading global Tier-1
customers with potential volume of 4 Million motors in the next 4 years. Currently, the
product is undergoing testing and validation at customer end.
Trunk Opening and Closing Device (TOCD)
TOCDs are fitted to both ICE-powered vehicles and EVs
[Technology-Agnostic]. This device uses an actuator (motor) [Refer Fig. 3] to open the
trunk latch automatically when you press the switch. It is generally installed in high-end
vehicles to add the premium feel to the vehicle predominantly in developed countries, and
is likely to get adapted across all vehicles in the foreseeable future. Igarashi Global
holds >55% of TOCD in global automotive market and Igarashi-Japan driving all New
Generation TOCD product shift to Igarashi-India as key OEMs looking for "Minus
China strategy".
Your Company is closely working with Global two Tier-1 customers for the development of
next-generation TOCD motors for commercial launch during FY2025. The RFQ volume is
expected to reach 25 Million in next 4~5 years.
Sub-Assemblies for DC Brushed & Brushless Motors
Your Company is a supplier of sub-assemblies for DC Brush/Brush Less Motors for Seat
applications motor, armature and brush holder assembly, Window Lift Application - stator
and armature assemblies, Fuel pump application armature and carrier assembly catering to
both global and domestic customers. Also, your Company is working in many new RFQ enquires
for these applications.
Armature Assemblies for Window Lift Motors
The automatic window lift becomes a common feature in 4W PV segments. The total Indian
WLM market stood at 10.1 Million units in FY2022 and will grow to 22.2 Million units by
FY2027 with CAGR of 17%. Your Company has a track record of supplying WLM armature
assemblies (Refer Fig. 4) to the key WLM market players for the past two decades and
populated 120 Million parts from 2010 for global and domestic customers. Your Company held
30% of domestic market share in FY2022 and is working to capture market share of 45% by
FY2025. Our development team is working on two new programs with key market players with a
potential volume of 5 Million units in the coming years. We expect the launch of the new
programs from 2024.
Carrier Assembly for Fuel Pump
Your Company has two decades of experience in Fuel pump sub-assemblies manufacturing
for the Brushed DC motor to the global Tier-1 customers. The total domestic fuel pump
market stood at 4.5 Million in FY2023 and will grow to 5.3 Million by FY2027 with a CAGR
of 8%. Your Company has a track record of supplying fuel pump carrier assembly (Refer Fig.
5) to the key FP market player for the past two decades and populated >47 Million parts
from 2010 for global and domestic markets. Our development team is working on two new
programs with key market players with potential volume of 5 Million units in the coming
years. We expect the launch of the new programs from 2024.
Motor Sub Assembly for Seat - Automatic Height Control
Your Company has been supplying motor sub assembly and brush holder assembly for seat
actuator to the global Tier-1 customers. Your Company has a track record of supplying
motor sub assembly (Refer Fig. 6) to the key market players for a decade and populated
>25 Million parts from 2014 for the global market. Our development team is working on
two new programs with the market player with potential volume of 6 Million units in the
coming years. We expect the launch of the new programs from 2023 & 2024.
BLDC Water pump sub-assemblies for Coolant Control Hub
Coolant control hub (Refer Fig. 7) system used for thermal management in the BEV &
Hybrid powertrain systems. This system is a centralised unit used to maintain the
temperature of both battery and traction motor in optimum Fig. 7 working level for better
system performance and increased life. BLDC technology is applied for better and
durability of the water pump. During the year, your Company has been successfully
nominated by leading global Tier-1 player for the development of B-samples for a CCH pump
program.
The B-samples have been successfully validated and tested Stator Assy. Rotor Assy.
Water at our customer end. The RFQ volume for the Europe market is ~7 Million units for a
period of 5 years. Advance dialogue towards commercial launch of this program is being
actively pursued by Igarashi Europe team. One more program with same customer and same
application has been awarded business worth 7 Million units and a product under
development.
BLDC Motor for Air Conditioner Damper Application
Your Company engaged with a leading Japanese manufacturer to manufacture and supply
BLDC motors (Refer Fig. 8) for dampers as per customer design. This product is fitted with
air-conditioners to address European market needs. The estimated volume is expected to be
5 Million in next 5 years with SOP from FY2025.
Indian Fast Moving Electrical Goods market BLDC Ceiling fan motor market - Industry
overview
The CFM market in India stood at 58 Million units in FY2023 [includes Induction as well
as BLDC motors], of which, Brushless Direct Current (BLDC) fan market stood at 6 Million
units, validating the huge headroom for growth. The use of BLDC motors has been on the
rise, owing to the fact that the technology ensures lower use of power and better power
savings. The Bureau of Energy
Efficiency for the manufacturers of ceiling fans and refrigerators, which came into
force in January 2023, which positively impacted the use of BLDC motor technology in
ceiling fan space. This technology enables power savings as high as 50%. Due to channel
restocking (non-star stocks) ahead of transition to the new BEE norms, the BLDC motor
penetration was slower during the year and is expected to gain momentum in the coming
years. On the back of the increasing demand, the Indian CFM market is expected to grow to
62 Million units by FY2026, of which, BLDC fans are projected to reach a substantial 15
Million units.
Due to huge traction for premium fans in the past few years, all leading brands are
launching high end fans with BLDC motors. This includes multi-tone under light options,
breeze and sleep timer and Internet of Things (IoT) enabled operations using voice control
via Alexa, OK Google or Mobile app. This is further enhancing demand for value-added
ceiling fans leading to increase in demand for BLDC motors in the Indian market. Your
Company is focus on premium, standard & economy series of BLDC ceiling fans.
Your Company(BEE) introduced has populatednew norms more thanof star 1.60 rating
Million BLDC solutions to Indian ceiling fan market since the launch of this product in
2020. Your Company is a leading partner to three key market players whose collective
market share is more than 56% in the organised CFM market and initiated development
process to add remaining 2 players contributing 26% of market share. The industry veterans
opine that the BEE transition would become a long-term positive for organised players in
the FMEG market segments.
Our development team is working on 36 programs [includes BLDC Motors, Sub-assemblies
and Controller parts] with leading 5 customers to secure a volume of 4 Million
motors and 2 Million Controllers in next 4 years.
Electronic System Design & Manufacturing (ESDM)
Over the past 3 years, your Company has significantly increased the Electronics Design
capabilities through new product launches & quality improvements. Our standard PCBs
are now supplied with RF Remote & IoT-enabled features. Your Company developed Wall
Regulator PCB compatible with all standard Induction fan regulators. This opens a new
gateway for all Government tenders & institutional business.
Your Company has introduced high-speed dual lane EMS machines to meet the growing
demand. Your Company has developed a Round type PCB controller (include under-light) for
the leading players for their premium fans, mass production of which will commence from
2023.
On quality perspective, your Company has enhanced testing capabilities in the recent
years with Electrical
& Thermal Stress test machines, Load testing machines and Noise Free Room to check
Motors.
These facilities reflect our quality conscious approach for the products across the
supply chain from the premises to the market.
R&D Development Projects EV Motor Development
As the Electric Vehicle (EV) market is fast-growing in Indian automotive E2W & E3W,
your Company is working on developing 3.3 kW Traction motor for the E2W and made the
concept samples and tested for preliminary performance. Your Company is now engaging with
one of the European customers whose strategy is to capture Indian E2W market in a larger
way. We started engaging with them and developing the customised 3.3 kW motor, development
and validation of which is expected to complete by this year.
Your Company is also engaging with domestic OEM on 7.5 kW Traction motor for E3W,
Concept samples has been given to customer for vehicle level fitment and performance
verification.
Your Company is also engaging domestic OEM on 15 kW Traction motor development for
higher CC E2W. The initial design and concept samples are developed and is under vehicle
level evaluation at customer end.
Electric Vacuum Pump (EVP)
The electric vacuum pump (Refer Fig. 10) is used in braking system to produce the
vacuum required for the brake booster which cannot be provided by the vehicles propulsion
engine or is not sufficient.
This application is mainly used in BEV and Hybrid as well as standard diesel and
gasoline direct injection vehicles (ICE). Your Company is developing this
technology-agnostic and higher price product to address Indian auto market. Our
development team is working on 3 programs with leading global / domestic
Tier-1 customers with potential volume of 2 Million motors in next 4 years.
BLDC Fuel Pump
The Electric Fuel pump fitted inside the fuel tank is used to supply the fuel from tank
to engine intake system. As your Company has two decades of experience in Fuel pump, it is
engaged in sub-assemblies manufacturing for the Brush motor for the global Tier-1
customer. Global customers are approaching us for the BLDC sub-assemblies for the fuel
pump while OEMs are migrating from conventional PMDC motor to BLDC technology to have
better system reliability in 4W applications.
The total domestic fuel pump market stood at 4.5 Million in FY2023 and will grow to 5.3
Million by FY2027 with a CAGR of 8%. Fuel pump with BLDC technology will capture 60% of
total market share by FY2027. Your Company is in the process of designing and developing
these products (Refer Fig.11) for domestic and global players in the market. The potential
volume for this product is ~ 10 Million units.
Fig. 11
BLDC Motor Optimisation for Ceiling Fan Application
Ever since the launch of BLDC Motor for Ceiling Fan applications, your Company R&D
team is consistently working on product innovation and value engineering. The main focus
is to reduce the cost by reducing the motor size and weight while improving the
performance. Your Companys team has successfully reduced the product size and weight of
the BLDC Motors to bring upon competitiveness in the product as follows: and also
| Part |
eTA1 Series (Weight |
eTA2.2 Series in Gms) |
Improve- ment |
| Stator Core |
1040 |
420 |
60% |
| Copper Wire |
210 |
160 |
24% |
| Rotor Steel Ring |
350 |
92 |
74% |
Electronics – R&D
Your Companys electronics R&D developed the products in standard, premium and
super premium segments in ceiling fans and also in non-ceiling fans like table fans, wall
mount fans, pedestal fans, exhaust fans, controllers for air coolers.
Standard ceiling fan features speed controls, off timers and remote-controlled
operations with RF remote Premium ceiling fan features IoT connectivity along with
Alexa/Google controls [Voice Control]
Super premium ceiling fan features IoT, multi-tone under-light and surround lights,
breeze and sleep functions
BLDC Motor with Wall Regulator Feature
BLDC befitting the conventional wall regulators to cater the requirements of
institutional & large corridors (railways, public buildings, hospitals, etc.).
Application for patent filed to protect the unique proposition which equips the BLDC
fans to pair with the conventional regulator. This new firmware with a fuzzy logic to
sense the behaviour of the wall regulator and adjust the speed steps of the BLDC motor as
per the standard requirement. (Refer Fig. 12)
BLDC TPW & Exhaust Fan Application
There is an increased push from Indian Government for "Make in India"
campaign & reduce imports from other countries. In line with this campaign, your
Company is actively working on a design for a competitive PCB controller for
Domestic Exhaust fans and Table/Pedestal/Wall (TPW) fans.
Currently, these BLDC fans are imported from China due to less available technical
knowledge & cost competitiveness.
A significant by samples submission, negotiation & SOP. The expected size of these
two segments is 16 Million.
Your Company is also working on PCB controllers for Water Pumps and Desert Coolers, the
market potential of which is 750 Million and 300 Million, respectively. These are very
niche products with limited players in the market. Customers welcome a technical &
cost competitive PCB proposal to pursue this project in upcoming quarters. Desert Coolers
hold immense potential for exports to the Gulf region.
Currently, used PCB controllers in majority of BLDC Motors are given in Figure 15.
Manufacturing strategy
Over the years, your Company has made significant strides in enhancement of in-house
machine building for cluster-automation, improved quality, process improvements and
reduction in machine maintenance costs.
With an ambitious target of improving per person per day productivity, your Company has
identifiedstrategic assembly lines and modified it with partial cluster automation to reap
the most productivity benefit with limited investments. five such retrofitting of cluster
successfully completed in FY2023.
Accommodating domestic customers have been a challenge to your Company due to the
nature of low volumes compared to that of global projects. Our continued efforts of
flexibility improvement to leverage modular changeover concepts and increased variant
handling capability have paved the path for accommodating number of new projects from
strategic domestic customers, thereby, establishing your Company as the preferred supplier
of most of the automotive Tier-1 customer in air management category.
With a constant focus and drive through ‘NIL SPILL approach, your Company has
been able to improve quality performance in FY2023, and customer return PPM has further
reduced to sub-1 PPM. Notably, a key customer, Bosch, has awarded your Company the
‘2022 Notable Supplier Award during their centenary celebrations October 2022.
Machine Building
Your Company, being a full-service supplier, has built expertise in the past two
decades to set-up, integrate and automate manufacturing lines while meeting emerging
global manufacturing practices. The Process Engineering team possesses high technical
skills for building critical equipment such as winding, fusing, turning, varnishing, and
others, for mass manufacturing. With the capabilities of in-house machine building, we
reaped the benefits of lower dependence on imports, cost control, better quality and
improved productivity in the backward integration of operations.
Key Financial Ratios as per SEBI Listing Obligations and Disclosure Requirements
(Amendment) Regulations, 2018
| Key Ratios |
FY 2022-23 |
FY 2021-22 |
| 1 Debtors turnover |
4.23 |
3.69 |
| 2 Inventory turnover |
4.68 |
3.96 |
| 3 Interest coverage ratio |
1.75 |
1.35 |
| 4 Current ratio |
1.41 |
1.51 |
| 5 Debt equity ratio |
0.21 |
0.18 |
| 6 Operating profit margin (%) |
3.24 |
8.34 |
| 7 Net profit margin (%) |
1.00 |
0.01 |
| 8 Return on Net Worth (%) |
1.00 |
0.01 |
Risks & concerns
Your Company has a robust risk management and ESG Policy in place which guides the Risk
& ESG Management Committee and the internal risk managementteamtoeffectivelymanage the
business risks. The Risk Management Committee comprises
Mr. Hemant M Nerurkar (Chairman), Mr. L Ramkumar, Mrs. SM Vinodhini and Mr. R
Chandrasekaran. The said committee met twice during the fiscal, on January 10, 2023 and
February 13, 2023.
The key risks faced by your Company are enumerated below:
| Risk |
Mitigation strategy |
| Macro risk |
|
| Global trade disruption and realignment Slow recovery in global markets
due to |
Diversification of products and markets to ensure a de-risked business
portfolio |
| global inflation and geopolitical factors Increasing energy and interest
costs |
Strengthening customer relationships to align all resources in-line with
markets for mutual benefit |
| Technology risk |
Exploring possibilities for non-organic growth and
strategic alliances |
| Shift towards electrification and |
Expanding bandwidth of products for Electric Vehicles and
improving |
| semi-autonomous vehicles |
performance of existing products for autonomous vehicles |
| Ever-changing consumer preferences Changes in product technologies |
Constantly upgrading technology of existing products for
broad-basing applications |
|
Expanding the energy-efficient BLDC motors portfolio for
consumer electrical applications |
| Market risk |
|
| New entrants in the market and competition from existing players |
Improve cooperation with customers by offering multiple value
propositions on products and services |
| Geographical localisation of facilities |
Real-time monitoring of logistics pipeline and global warehouses |
| Pricing pressure from customers Customer and geographical concentration Energy rating
transition for BLDC fans |
Continuous cost-competitive actions across value-stream and offer higher
performance products to remain preferred suppliers to customers Focus on star-rated BLDC
fan motors |
| Risk |
Mitigation strategy |
| Operational risk |
|
| Stringent quality requirements with new performance specifications Supply chain
challenges |
Upgradation of design capabilities, validation, FMEA and testing
capabilities to meet new standards including collaboration for system level validation |
| Manufacturing automation Capital expenditure and capacity |
Strengthening relationships with key supply chain partners and
development of second and third sources |
| Skilled human resources |
Increasing cluster automation and robotics on manufacturing lines |
|
Flexible higher capacities to use same line for multiple products and
multi-skilling of human resources. |
|
Imparting trainings on continuous skill development of employees and
wellness trainings |
| Financial risk |
|
| Maintaining financial stability Liquidity and capital access |
Maintaining low levels of leverage and continuous dialogues with
financial institutions |
| Foreign exchange fluctuation Commodity price movements |
Entering forward contracts in line with the hedging policy which is
monitored by the Audit Committee on a regular basis to curb forex risk |
| Product liability and warranty |
Arrangement of pass-through mechanisms for commodity price movements
with time lag to ensure faster commodity movements |
|
Optimal coverage of liability insurance in line with industry practices
and customer requirements |
| Cyber security risk |
|
| Cyber-attacks Protection of IT systems and data |
Adequate internal control measures taken to protect networks, computers,
programs, and data (Including ESG) |
|
Cyber security threat audits done by external experts at regular
intervals Continued reinforcement of stringent security policies and procedures
Implementation of advanced firewalls and anti-virus software |
| Health, Environment and Safety Risk |
| Achieving the greenest and safest operations. |
Complying with regulatory and customer requirements on environment
requirements & global sustainability policies |
|
Planned wellness programmes for all employees |
|
Ensuring work safety practices with periodic audits |
| Natural calamities risk |
|
| Disruption of business operations by natural calamities or epidemics or pandemics |
Adoption of procedures for natural calamity situations Robust business
continuity plan Management task force for tackling such eventualities |
Human resources
Your Company is cognizant of the pivotal role played by its human capital in its
day-to-day operations. Over the years, your Company has been sharpening its focus on
strengthening the capabilities of its employees on the back of leadership, technical, and
behavioural training. In addition to trainings, the strong HR policy of your Company
enables equality and transparency across the organisation, thereby creating a safe and
conducive environment wherein employees can deliver their best outcomes. Your Company has
successfully aligned the goals of its employees with that of the organisation. Further,
your Company also engages and motivates the employees, helping them achieve their goals,
in turn, helping your Company grow. As on March 31, 2023, the total employee base of the
Company stood at 669.
Internal control systems & their adequacy
Your Company has in place a robust internal controls system. The adequacy of the system
is validated by the fact that it helps in ensuring transactions are properly authorised,
recorded, and reported, in addition to safeguarding its assets. Further, your Company also
has in place well-documented policies and procedures, which is complimented by the
extensive reviews carried out by the internal auditors. Such review reports are
periodically reviewed by the management and the Audit Committee of the Board, ensuring a
de-risked business.
Cautionary statement
This report contains forward-looking statements. All such statements are subject
to risks and uncertainties. Actual results could differ materially from those
expressed or implied depending on the circumstances.
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