Ucal Fuel Systems Ltd Management Discussions.


2020-21 was a year of Pandemic due to COVID 19. The entire world came to a halt due to the restrictions and lockdown that were put in place to avoid the spread of COVID 19. In India the impact was felt throughout the automotive industry as the country was under complete lockdown during 1st quarter of 2020-21. Two-wheeler sales registered a de-growth of (13%) over April-March 2021 compared to the same period last year. The domestic market experienced a sharp decline of (13%) and export sales declined by (7%). Within the two-wheeler segment Motorcycle sales de-grew by (9%) and Scooter sales de-grew by (24%) in April to March 2021 over the same period last year. The automotive industry recorded a more than 70% drop due to stringent lockdown and production/sales were hampered heavily. Despite continuous lockdowns and issues in restarting the supplies, 2nd quarter of 2020-21 and 3rd quarter of 2020-21 saw a fast ramp up. The automotive industry recovered quickly and was back on track by August 2020 and September 2020 and by utilizing the sudden spurt in demand due to a preference for personalized mobility to maintain social distancing. The Indian Automotive industry had a good Festival season sale in the 3rd quarter of 2020-21. Domestic sales registered growth in 3rd quarter of 2020-21, backed up with strong export demand.

On the technology front, the Indian automobile emission norms are now on par with the world industry leaders. Though the changes in the revenues of the company was proportional to that of the auto component/ auto industry, the company was able to en-cash on the technology innovation with a breakthrough product in e-Carb (Electronic Carburettor) which is a cost-effective solution to meet BSVI norms in 2W segment. The Company’s efforts to meet the stringent emission norms from the year 2020 had fructified. With sustained R&D efforts, e-Carb (Electronic Carburettor) was proved as an Optimum Solution to meet the BSVI norms with Minimum Vehicle level Changes. The Company also launched the Electronic Control Unit (ECU) for e-Carb and added almost 8 new models in ECU supplies to its major OEM. The Company has now provided over 1 million e-Carb into the market. The Company has been able to control the financial and administration costs through prudent management practices. The Company’s R&D is continuously responding to the competitive environment created by the various changing models of the OEM’s, thereby ensuring that the company’s image as a technology provider is maintained. The company’s foray into newer areas like defense, aerospace and electronic components continue and these activities can be expected to yield results in a few years from now. The auto component industry is expected to follow the Original Equipment Manufacturer (OEM) in adoption of the electric vehicle technologies. The global move towards electric vehicles will generate new opportunities for auto component suppliers and the company is gearing up for the same.


The company is undergoing a technological transformation as it prepares to expand the e-Carb system which meets BSVI norms to the OBD II requirements which will be mandatory from 1st Apr’2023. The company continues to invest in R&D and create and acquire intellectual property towards this end. The focus on marketing Electronic Fuel Injection (EFI) system and mechanical Throttle Body Assembly continue with addition of new customers for this product range.

The EFI development has fructified and co-development for a 250cc engine application for a niche segment has started. The company is working towards establishing itself as a supplier of mechanical and electronic carburetors and fuel injection systems by the year 2021-22. In Electronic Throttle Valve (ETV), proof of concept has been completed with one of the major OEM and project is likely to start by 2022-23. This will be a key product for growth in financial year 2022-23 as we are approaching other major OEMs in LCV, HCV and 2W segment.

The company intends to enter the electric vehicle segment in the future and is preparing itself for the same. The company’s long-term vision is to become a one-stop shop and solution provider for all engine management requirements of the two-wheeler industry and major supplier of vacuum pumps, oil pumps, ETV and E-pumps for the four-wheeler industry and efforts are continuing towards achieving this objective.


The year started off with slackness particularly due to pandemic in 1st quarter of 2020-21 and increase in vehicle prices because of introduction of BSVI norms, Industry registered de growth of almost (70%) in the 1st quarter of 2020-21 compared to 19-20 due to COVID Lockdowns. However the trend was reversed and market rebounded to the V shape recovery in 2nd quarter of 2020-21 and 3rd quarter of 2020-21 thanks to high sales due to personal mobility requirement. The company ended 2020-21 with a (10%) drop in turnover as compared to 2019-20. The introduction of e-Carb in <125cc segment and export model carb for 160cc segment in 2 W had positive impact in the turnover. Export sales have increased compared to 2019-20 due to Oil Pump Exports. While there has been a good improvement in the offtake of spares by dealers and export distributors, the off take by the OEMs had increased significantly. The Spares Segment registered a positive growth of 30% which had helped in both top line and bottom line



• Technology in carburetor (mechanical and electronic) throttle body, air suction valves, pumps, ETV

• Capabilities (both technology & infrastructure) to develop products for meeting BSVI norms

• Capability in frugal engineering

• Flexibility in Product development and domestic Supply chain to meet the customer demand

• Facilities in pressure die castings, plastic and rubber molding

• Well-trained and disciplined workforce

• Good work culture

• Preferred supplier of OEMs


No new products to support E-mobility

• Low IT penetration

• Slow growth in export business

• Limited products for the 4W segment

• High employee cost


• Entry into the EV segment with new products

• Electronic design, development and manufacturing capability

• Penetrate Export market with existing products

• Entry into new markets like South America, Africa and ASEAN

• Entry into Commercial and Tractor segments and electric mobility vehicles


• Few new development of Engine platform in IC engines

• Competitive pressure on pricing policies

• Rising input cost

• Relentless pressure to reduce prices by OEMs thereby affecting profit margin

• Increased emphasis on electric mobility


The company provides value to the Customers by offering engineering solutions through product / technological innovation. The focus for R&D in the financial year 2020-2021 has been to stabilize the developed electronic air-fuel management system, electric air suction valve for the various Customer applications to meet the stringent BSVI emission regulations. To address the next generation compliance, the company is developing products with additional features to improve the product life cycle management. The company is developing products for the thermal management system – Intake Throttle Valve, HC Dozer for the Commercial vehicle applications, Electronic Throttle Valve for the 2-W segment, FI system for the global power sport segment. Anticipating the technology changes in the mobility – electrification, hybridization, engine down-sizing (Gasoline Direct Injection with Turbo charge) R&D is developing products like e-Coolant pumps, e-Vacuum Pump, Motor controller, sensing of the throttle response, Vacuum pump with operation at high engine rpm. To develop and validate the new products / technologies, additional facilities and upgradation of existing facilities are being installed. The R&D validation lab continues to have the accreditation by NABL and the recognition from the Department of Scientific and Industrial Research, Ministry of Science and Technology. Key products / technologies developed in the financial year 2020-2021 include electronic air-fuel management system, engine management system integration and calibration, electric air suction valve, mechanical throttle body assembly, intake throttle valve, e-Coolant Pumps and e-Vacuum Pumps.


During the financial year 2020-21, the company had enhanced the e-Carb capacity from 150K/month to 180K/month. The company had also established a new facility at Plant 10, for manufacture of Throttle Body with an installed capacity of 40K/month. These Throttle Bodies are being supplied to M/s Napino Control Systems who are a tier 1 vendor to M/s Hero Motor Cycles India Limited., This business is acquired, keeping in mind the huge business potential available with M/s Hero Motor Cycle India Limited.,


The Human Resource development frameworks follows a meritocracy and strives for diversity in nationality, caste, age, physical ability and religion; and believe in equal career opportunities for all. The Human Resource pre plans the Workforce requirement in anticipation assuming the position of a Business Partner and focus on the Employee Engagement and recognizes the exceptional performers and focus on Learning and Development, Career & Succession planning for Organization Development. Towards sustenance and delivering improved results, these constituents have a structured approach, policies which are reviewed and updated periodically. Current and future skill-based competency development are planned and executed through both in-house programs and nationally acclaimed programs, continuing education, challenging project assignments and The Human Resources (HR) department is driven by the guidelines:

• To help our employees realize their potential – to develop, grow and achieve their purpose

• To build the right culture and capabilities

• To make the company the great place to work for passionate, innovative people who wish to make a difference HR Management at the company goes beyond the set boundaries of compensation, performance reviews and development. The company looks at the employee’s entire work-life cycle, to ensure timely interventions that help build a long-lasting and fruitful career. With this in mind, the company has initiated several positive changes in HR practice this year. Employee’s safety continues to be an important focus area. Continuous communication with employees on available safety measures to increase awareness is undertaken throughout the year. To ensure that employees are at their productive best, the company continued to work on simplifying internal processes through a collaborative effort with various teams.

To foster a positive workplace environment, free from harassment of any nature, the company has institutionalized an Internal Complaints Committee (ICC) in all locations across India to consider and address sexual harassment complaints in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company continues to maintain its record of good industrial relations without any interruption in work.


The company attaches great importance to the health and safety of its employees. Towards this end, strict safety measures are enforced across the organization at all locations at all times. All manufacturing operations and plants adhere to all pollution norms by continually improving environmental and occupational health and safety management systems. Water conservation, reduction in use of hazardous chemicals, waste management and adopting renewable energy continue to be given emphases.


The information and opinion expressed in this report describing the company’s objectives, projections, estimates, future business developments and expectations could contain certain "forward-looking statements" within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied in this report. Important factors that could make a difference to the company’s operations include, among others, economic conditions affecting demand/supply, price conditions in the domestic and overseas markets in which the company operates, changes in the government regulations,