Ucal Fuel Systems Ltd Management Discussions.


2019-20 was a key milestone for the Automobile industry. The industry had to change over from BSIV emission norms, leapfrogging to BSVI. This was a major change, as the emission norms were stringent with almost 80% reduction in the engine out emission as the target. The automobile industry as a whole degrew by 15% in the financial year 2019-20 as compared to that of financial year 2018-19. Two-wheeler sales registered a degrowth of 14% over April-March 2020 compared to the same period last year. Within the two-wheeler segment Motorcycle sales degrew by 13% and scooters sales degrew by 15% in April to March 2020 over the same period last year. Due to BSVI change over from 1st April 2020 and sudden stoppage of production from 23rd March 2020 due to the pandemic lockdown almost all Original Equipment Manufacturers (OEM) ended the year in a negative trajectory. The Indian automobile emission norms are now on par with the global leaders. Though the changes in the revenues of the company were proportional to that of the auto component / auto industry as a whole, the company was able to make a technology innovation with a breakthrough product in electronic carburettor (e-Carb) which is a cost effective solution to meet BSVI norms in the two-wheeler segment. The companys efforts from many years to meet the stringent emission norms from the year 2020 have borne fruit. With sustained R&D efforts, Electronic Carburettor has proved to be an optimum solution to meet the BSVI norms with minimum vehicle level changes. The company also developed Electronic Air Suction valve which is a key part in reducing the initial emissions in the vehicle. With continuous monitoring of the stocks and inventory, the company ensured almost zero non-moving stocks during the changeover from BSIV to BSVI. The company is continuously in the process of controlling the rising material, financial and administration costs through prudent management practices. The companys R&D is continuously responding to the competitive environment created by the various changing models of the OEMs, thereby ensuring that the companys image as a technology provider is maintained. The companys foray into newer areas like defence, aerospace and electronic products continues. 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 to not only meet BSVI norms but also the OBD II requirements which will be mandatory from 1st April 2023. The company continues to invest in R&D and create and acquire intellectual property towards this end. The graduation to the BSVI norms was a formidable task and the company is continuously working on improving this technology through acquisition, absorption, skilling of manpower and by creating the required infrastructure. The efforts are continuing to develop the Electronic Fuel Injection (EFI) System and mechanical and electrical Throttle Body Assembly which will be the key products in the two-wheeler segment.

The EFI development is under various stages of testing and validation. Thus the company is working towards establishing itself as a supplier of mechanical and electronic carburettors and fuel injection systems. The company intends to enter the electric vehicle segment in the future and is preparing itself for the same. The companys long term vision is to become a one-stop shop solution provider for all engine management requirements of the two-wheeler and four-wheeler industry and efforts are continuing towards achieving this objective.


The year started off with slackness, due to increase in vehicle prices because of introduction of safety norms through Antilock Braking System and Combi Break system. Industry registered a degrowth of almost 14% in the first half of the financial year as compared to the higher base of 2018-19. The trend continued in the second half of the financial year due to the challenges of change over to BSVI norms. The company ended 2019-20 with a 14.5% drop in turnover as compared to 2018-19. The introduction of new carburettors for the <125cc Segment and 160cc Segment in two-wheelers had some positive impact on the turnover. The oil pump and vacuum pump sales registered a degrowth in 2019-20 as compared to 2018-19. Export sales have increased compared to 2018-19 due to Oil Pump exports. While there has been a good improvement in the offtake of spares by dealers, the offtake by the OEMs has been flat predominantly due to the change in the emission norms. The spares segment registered a positive growth of 12%.


• UCAL brand name

• Operational Excellence.

• R&D Facilities certified by Government of India

• Technology in carburettor (mechanical and electronic) fuel injection systems, air suction valves, pumps, ETV and EGR.

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

• Electronic design, development and manufacturing capability.

• Facilities in plastic and rubber molding.

• Capability in frugal engineering.

• Well-trained and disciplined workforce.

• Good work culture.

• Preferred supplier of OEMs


• Low IT penetration.

• Slow growth in export business.

• Limited products for the diesel segment.

• High employee cost


• Large scope for exports for all existing products.

• Untapped domestic customers for existing products.

• Huge domestic market for spares which is yet to be fully exploited.

• Entry into Commercial and Tractor segments and electric mobility vehicles.


• Competitive pressure on pricing policies.

• Rising input cost.

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

• Increased emphasis on electric mobility vehicle.


The company is committed to provide value by providing engineering solutions to the customers through product / technological innovation. The focus for R&D in the financial year 2019-2020 had been to adopt and implement the electronic air-fuel management system, electric air suction valve for the various customer applications to meet the stringent BSVI emission regulations. Gearing-up for the technology changes in the mobility segment, R&D is developing products like e-Coolant pumps and electrification of auxiliary components for various applications.

New facilities and upgradation of existing facilities are being installed to design, develop and validate technologies and products. 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. The engineers from R&D continue to present technical papers in the National and International conferences. Key products / technologies developed in the financial year 2019-2020 include electronic air-fuel management system including the system integration and calibration, electric air suction valve, mechanical throttle body assembly, intake throttle valve, e-Coolant Pumps and e-Vacuum Pumps.


Our major focus during 2019-20 was to establish e-Carb and electronic Air Suction Valve (e-ASV) facilities, in order to cater to BSVI norms. Towards this end the company has established multiple lines simultaneously, thereby reducing the lead time for creating capacity. State-of-the-art tooling, using Poly Crystalline Diamond in combination with CNC machines were employed in e-Carb machining which has enhanced the process capability, to meet stringent emission norms required for BSVI. Establishment of on-line SPC technique helped in constant monitoring of process data and to provide a real time feedback, to initiate corrective and preventive measures as and when needed.

The company employs German technology, to achieve high level of product cleanliness. e-Carb and e-ASV are assembled and tested in a cleanroom environment to improve product quality. Manual work content has been reduced due to the introduction of semi-automated Assembly and Testing processes. Automated tuning and testing methods were established to avoid defective product reaching the customer. End-to-end data capturing and traceability is being established to ensure supply of zero defect product to customer. In order to avoid/reduce new investment, constant efforts were made to identify and utilize existing unused equipment in new projects.


The Human Resource development framework followed at the company include Workforce planning, Employee engagement, Performance and Compensation management, Learning and Development, Career and Succession planning and 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 job rotations.

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 best place to work for passionate, innovative people who want 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 employees 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 our HR practice this year. Employees 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 organisation 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 companys 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 companys 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, tax laws and other incidental factors.