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At present, the global economy seems poised for a gradual recovery after facing severe challenges from the Russia s conflict with Ukraine. China is witnessing a strong rebound following the reopening of its economy. Supply-chain disruptions are resolving, and the impact of the war on energy and food markets is subsiding. Additionally, major central banks synchronized tightening of monetary policies is expected to bear fruit, bringing inflation back in line with targets. According to the April 2023 IMF forecast, global growth is projected to reach 2.8 percent in 2023, with a modest increase to 3.0 percent in 2024.

Key factors that shaped the world economy in 2022 are expected to persist in 2023, though with varying intensities. High debt levels limit the fiscal policymakers capacity to address new challenges. While commodity prices have moderated after Russia s invasion of Ukraine, geopolitical tensions and the ongoing war continue to impact global dynamics.

Interestingly, emerging markets and developing economies, including India as a frontrunner, are already experiencing strong growth, with growth rates (fourth quarter over fourth quarter) surging from 2.8 percent in 2022 to 4.5 percent in 2023.

According to the World Bank, India has showcased remarkable economic growth despite facing significant global challenges. The country remains one of the fastest-growing economies in the world, with overall growth estimated to be 6.9 percent for the full year, and real GDP witnessing a 7.7 percent year-on-year increase.

The Asian Development Bank (ADB) projects that India s gross domestic product (GDP) growth will moderate to 6.4 percent in Financial Year 2023-24, followed by a rise to 6.7 percent in Financial Year 2024-25. This growth trajectory is primarily driven by robust private consumption and private investment, bolstered by the government s efforts to enhance transport infrastructure, logistics, and the business ecosystem.


The Indian economy, appears to have moved on after its encounter with the pandemic, staging a full recovery recently ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY 2022-23. Yet in the current year, India has also faced the challenge of reining in inflation that the European strife accentuated. Measures taken by the government and RBI, along with the easing of global commodity prices, have finally managed to bring retail inflation below the RBI upper tolerance target in November 2022.

Agencies worldwide continue to project India as the fastest-growing major economy at 6.5-7.0 per cent in FY23. These optimistic growth forecasts stem in part from the resilience of the Indian economy seen in the rebound of private consumption seamlessly replacing the export stimuli as the leading driver of growth. The uptick in private consumption has also given a boost to production activity resulting in an increase in capacity utilisation across sectors. The rebound in consumption was engineered by the near-universal vaccination coverage overseen by the government that brought people back to the streets to spend on contact-based services, such as restaurants, hotels, shopping malls, and cinemas, among others. Vaccinations have facilitated the return of migrant workers to cities to work in construction sites as the rebound in consumption spilled over into the housing market.

The Capital Expenditure (Capex) of the central government, which increased by 63.4 per cent in the first eight months of FY23, was another growth driver of the Indian economy in the current year. A sustained increase in private Capex is also imminent with the strengthening of the balance sheets of the Corporates and the consequent increase in credit financing. A much-improved financial health of well-capitalised public sector banks has positioned them better to increase the credit supply. Consequently, the credit growth to the Micro, Small, and Medium Enterprises (MSME) sector has been remarkably high.

According to the second advance estimates released by the National Statistical Office (NSO) in January this year India s real GDP growth for FY23 is placed at 7.0%, driven by private consumption and public investment. Index of Industrial Production (IIP) expanded by 5.2% while the output of eight core industries rose even faster by 8.9% in Jan 23 & 6.0% in Feb 23, indicative of the strength of industrial activity. However, in the services sector, domestic air passenger traffic, port freight traffic, e-way bills and toll collections posted healthy growth in Q4, while railway freight traffic registered a modest growth. Purchasing Managers Indices (PMI) pointed towards sustained expansion in both manufacturing (56.4) and services in March (57.8). Further support to economic growth will come from the expansion of public digital platforms and path-breaking measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes to boost manufacturing output.

Global growth has been projected to decline in the second half 2023 and is expected to remain generally subdued in the following years as well. The slowing demand will likely push down global commodity prices and improve India s Current Account Deficits in FY24. Growth is expected to be brisk in FY24 as a vigorous credit disbursal, and capital investment cycle is expected to unfold in India with the strengthening of the balance sheets of the corporate and banking sectors.


The automobile industry is one of the key drivers of the Indian economy, it contributes 6% to India s GDP. India is the second largest manufacturer of Two-wheeler, the largest manufacturer of Three-wheeler and 3rd largest manufacturer of passenger cars in the world.

During the fiscal year 2022-2023, the industry experienced a notable upswing in response to the recovery of economic activity and enhanced mobility. There has been a positive demand sentiment across various automotive segments, including passenger cars, commercial vehicles, and tractors, leading to improved sales for industry participants.

The commercial vehicle (CV) segment, in particular, has witnessed robust growth. This growth can be attributed to increased infrastructure spending by the government, strong replacement demand, the surge in last-mile connectivity due to e-commerce and heightened industrial activity. Major commercial vehicle Original Equipment Manufacturers (OEMs) have also benefited from higher volumes, an improved product mix, and the positive impact of commodity price corrections, resulting in improved profitability and margins.

Overall, the industry s performance in FY 2022-2023 reflects the positive market dynamics, increased demand, and favorable factors contributing to the growth and profitability of automotive businesses.

Automobile production trends (Source: SIAM)

Category 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Passenger Vehicles 40,20,267 40,28,471 34,24,564 30,62,280 36,50,698 45,78,639
Commercial Vehicles 8,95,448 11,12,405 7,56,725 6,24,939 8,05,527 10,35,626
Three Wheelers 10,22,181 12,68,833 11,32,982 6,14,613 7,58,669 8,55,696
Two Wheelers 2,31,54,838 2,44,99,777 2,10,32,927 1,83,49,941 1,78,21,111 1,94,59,009
Grand Total 2,90,92,734 3,09,09,486 2,63,47,198 2,26,51,773 2,30,36,005 2,59,28,970

Automobile domestic sales trends (Source: SIAM)

Category 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Passenger Vehicles 32,88,581 33,77,389 27,73,519 27,11,457 30,69,523 38,90,114
Commercial Vehicles 8,56,916 10,07,311 7,17,593 5,68,559 7,16,566 9,62,468
Three Wheelers 6,35,698 7,01,005 6,37,065 2,19,446 2,61,385 4,88,768
Two Wheelers 2,02,00,117 2,11,79,847 1,74,16,432 1,51,20,783 1,35,70,008 1,58,62,087
Grand Total 2,49,81,312 2,62,65,552 2,15,44,609 1,86,20,245 1,76,17,482 2,12,03,437

Further, Indian Government aims to have EVs comprise 30% of new private vehicle registrations, amounting to 8 crore EVs, by 2030 which would indeed require the implementation of robust nationwide charging network and currently, we are witnessing the electrification of the vehicles on growing pace throughout the Auto-industry sector.

According to the data report by Invest India, the Indian Automotive Industry is worth more than USD $222 Billion expected to reach USD $300 Billion by 2026 by expanding at a CAGR of 15%, and it contributes 8% of the country s total export and is set to become the 3rd largest in the world by 2030. Further, it has been estimated that the Vehicle penetration will reach up to 72 vehicles per 1000 people by 2025.

Keeping in view of the ongoing electrification of India Automotive Industry, your Company has shown special thrust on EV and work on adaptation of new technology and has taken initiatives such as development of Advance Technology Components and Electric Vehicle Components and enhancement of engineering capabilities to amplify the designing and manufacturing capacity.


The Indian automotive industry remains well poised to ride strong growth momentum as the industry focuses

on reducing reliance on imported products and working towards developing a strong domestic supplier ecosystem. In order to remain relevant and stay ahead of the curve and establish the country as a global auto component manufacturing hub, it is equally important to make investments in technology and work towards

fully digitalising manufacturing and non-manufacturing operations. Although, there are positive factors driving the demand environment, supply chain constraints leading to shortage of chips, high cost of raw material, increase in logistics cost, Availability of skilled manpower, Fast technological changes, Heavy capex cost due to fast technological changes for Electric Vehicles and rising fuel prices could impact growth for the industry. Moreover, implementation of new regulations to meet the stringent second phase of BS VI emission norms has resulted in increase in the cost of the vehicles, and this coupled with global recessionary trend and elevated geopolitical tensions could impact growth of the industry.

The Government of India has launched BS VI phase 2 real driving emissions (RDE) norms w.e.f April 1, 2023. Previously, Bharat Stage VI or BS VI emission norms came into effect in India on April 1, 2020. The Indian government decided to skip BS V altogether and straight away shifted from BS IV to BS VI. All new vehicles, including cars, two-wheelers and commercial vehicles, now have to comply with the latest emission standards. It significantly impacted the automotive sector as the vehicles became more expensive along with being, of course, eco-friendly but the diesel cars vanished from the small car hatchback & sedan segments completely due to high upgradation costs and low demand. The BS VI norms introduced stricter limits on the emission of pollutants from vehicles and they are equipped with advanced emission control technologies such as particulate filters, selective catalytic reduction and improved engine management systems. Although, BS-VI have all the best features & supporting clean and green environment, however the industry had allocated a substantial capital investment to make their vehicles and their components B-VI complied. Just few years back similar investment was made when BS-IV was made applicable, Industry could not recover its investment and within 3 years a new level introduced with skipping of BS V. Now the focus of Government is shifting to EV and the Industry has concern to recover the capital investment.


The domestic automotive industry is expected to grow at high single-digit levels in FY 2023-24. According to the report, the demand for the passenger vehicles segment is expected to grow at 6-9%, commercial vehicles by 7-10%, two-wheelers by 6-9% and tractors by 4-6% in FY 2023- 24. (Source: ICRA) We are confident that we can grow in line with the market by leveraging our strong foundation in New Product Development (NPD) for various platforms and variants as well as our ongoing efforts to optimise capacity utilisation and reduce inventory costs through strategic initiatives. Additionally, our implementation of Total Productive Maintenance will help us to eliminate waste and optimise resource utilisation across all critical processes. Our overarching goal is to increase market share while introducing innovative products and maintaining a focus on cost competitiveness, productivity and quality.

If the supportive trend persists the Indian automotive industry is likely to witness sustained growth momentum going forward despite minor headwinds in the form of rising interest rates and cost increases due to new emission and safety norms. Introduction of vehicle scrapping policy for scrapping and replacing old vehicles is likely to aid growth of the industry. Adoption of Electric Vehicles (EVs) is expected to accelerate in the coming years as EV becomes more cost competitive backed by supportive government policies, enhanced charging infrastructure and consumer willingness to move towards clean and sustainable mobility solution.

The Indian passenger car market is expected to reach a value of US$ 54.84 billion by 2027 while registering a CAGR of over 9% between 2022-27.

The electric vehicle (EV) market is estimated to reach Rs. 50,000 crore (US$ 7.09 billion) in India by 2025. A study by CEEW (Council on Energy, Environment and Water) recognised a US$ 206 billion opportunity for electric vehicles in India by 2030. This will necessitate a US$ 180 billion investment in vehicle manufacturing and charging infrastructure. According to NITI Aayog and the Rocky Mountain Institute (RMI), India s EV finance industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030. A report by the India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026.


Input Material cost:

The Company faces the critical issue of rising steel prices, a primary raw material for its products. This challenge is further intensified by the ongoing Russia-Ukraine conflict, posing a threat to the Company s margins within the fiercely competitive auto component sector.

To address this risk, the Company remains dedicated to enhancing its operational performance and advancing the development of technologically superior components that surpass competitors offerings. Additionally, the Company has strategically diversified its supply chain and is not reliant on a single source or supplier. A specialized core team with expertise in vendor management closely monitors steel prices and diligently negotiates to secure favorable pricing terms in the best interest of the Company. These measures are implemented to minimize the impact of escalating input costs and safeguard the Company s profitability.

By continuously striving for operational excellence, fostering technological innovation, and employing effective vendor management strategies, the Company aims to navigate the challenges arising from rising steel prices and geopolitical uncertainties, thereby ensuring its sustained competitiveness in the auto component sector.

Disrupted Supply Chain: The ongoing conflict between Russia and Ukraine, which has persisted for more than 1 year and continues to unfold, has significantly disrupted the supply chain within our industry. This disruption has led to a surge in steel prices, increased freight costs, and a broader inflationary impact that could potentially impact overall demand. While the uncertain geopolitical situation poses challenges, it also presents opportunities.

To navigate these challenges, your Company has been closely monitoring the developments in Eastern Europe. We have proactively engaged with our international customers, seeking their cooperation in extending delivery timelines and revising rates to accommodate the rising input costs. Moreover, we have already initiated efforts to identify and develop alternative sources of raw materials and transportation for both materials and finished goods.

By staying vigilant and proactive, we aim to mitigate the impact of the supply chain disruptions caused by the Russia-Ukraine conflict. We are committed to adapting and finding innovative solutions to meet the evolving needs of our customers in this dynamic environment.

Foreign Exchange Fluctuation: The Company acknowledges the significant concern posed by the fluctuating and declining value of the Indian Rupee against the US Dollar, particularly in relation to the repayments of ECB loans. However, the Company remains optimistic about offsetting the impact of the increased dollar rate through its export earnings, which contribute to approximately 28.94% of its total revenue.

To further mitigate the risk associated with currency fluctuations, the management has implemented a measure by fixing the LIBOR component in the total interest rate agreed for External Commercial Borrowings. This step aims to minimize the exposure to exchange rate volatility and ensure a more stable borrowing cost. During May 2023 the Company has shifted from LIBOR to SOFAR (Secured Overnight Financing Rate) to meet the new international benchmark of interest rate on foreign Borrowings.

By leveraging its export earnings, implementing fixed interest rates, and avoiding the need for commodity hedging, the Company aims to navigate the challenges posed by the fluctuating Indian Rupee and maintain stability in its financial operations.

Change in customer behaviour: Indian auto component manufacturers have experienced a significant change in customer behaviour in recent times. Several factors have influenced this shift, including changing economic conditions, evolving market dynamics, and technological advancements in the automotive industry.

Customers are placing a greater emphasis on product quality, reliability, and innovation. They are seeking components that offer advanced features, improved performance, and enhanced safety standards. Customers are increasingly conscious of environmental issues and are showing a preference for eco-friendly components. There is a rising demand for electric vehicle components, energy-efficient solutions, and sustainable manufacturing practices.

To address these changing customer behaviours, the Management of the Company focusing on product innovation, technological advancements, sustainable practices, and digital transformation. They are investing in research and development, adopting agile manufacturing processes etc to meet the evolving needs of customers and maintain a competitive edge in the market.

Technology Risk: Original Equipment Manufacturers (OEMs) in the automotive industry are proactively focusing on technological advancements to remain competitive and meet evolving consumer demands. Building research and development (R&D) capabilities and fostering a supportive ecosystem present significant challenges for the industry. OEMs rely on Tier-1 suppliers for technology upgrades and material innovations. To mitigate risks, your Company has consistently invested in technology upgrades to align with changing customer requirements.

We are actively engaged in extensive R&D efforts to stay abreast of consumer expectations and effectively adapt to the changing market landscape. By prioritizing technology and innovation, we strive to maintain our competitive edge and cater to the evolving needs of our customers.

Strength of the Company

Established track record of more than three decades as one of the leading manufacturers of critical high-precision gears, shafts and transmission components across segments.

One of the very few components manufacturers catering to diverse segments of Two Wheelers, Passenger Cars, Commercial Vehicles, Agriculture, Off-road and Engines.

Strategically located state-of-the-art manufacturing facilities in India, Canada and USA witha synergistic operating model offering unique value.

Long-standing relationships with segment leaders and marquee customers with shared vision & collaborative development approach. Operational excellence drive through Lean and TPM providing uncompromised quality solutions and rapid & first-time right product development.

Entrepreneurial, Empowered, loyal & committed team of over 2500 employees and strong suppliers relationships


On standalone basis, the total revenue stood at Rs. 7906.05 million compared to Rs. 6517.49 million during the previous year. The total turnover from operations stood at Rs. 7818.14 million as compared to Rs. 6446.01 million in FY 2021-22, registering a growth of 21.29%. The profit before tax stood at Rs 693.95 million as compared to Rs 536.63 million in the previous year, recording a significant increase of 29.32%. Basic EPS stood at Rs. 26.82 and diluted EPS stood at Rs. 26.79. Similarly, the net profit after tax stood at Rs. 503.40 million as compared to Rs 385.19 million in previous year, registering a significant growth of 30.69 %.

Revenue Highlights:

Year on year revenue growth in FY 22-23 is >21% (volume growth and product mix ~ 17% and remaining on account of steel inflation and forex). Revenue share of Two-Wheeler (TW) ~ 38%; Commercial Vehicle (CV), Agriculture and Off-road ~ 42% and Passenger Car (PC) ~ 20%

In TW business, increased Share of Business (SOB) with our current customer In CV business, grown as per customer growth rate

In PC business, revenues increase driven by addition of a new platform

The Company recorded an export turnover of Rs. 2262.22 million compared to Rs. 1872.67 million during the previous year, recording a significant increase of 20.80%. The total exports are now 28.94% of the total turnover.

Increase of 21.29% in the top line on standalone basis clearly indicates the effective management and significant improvement in the overseas operations, despite geo-political and volatile macroeconomic situation across the Globe.

On the consolidated side, the turnover was recorded till the close of the financial year at Rs. 11692.23 million compared to Rs. 9706.35 million during the previous year. The profit after tax stood at Rs. 231.14 million as compared to Rs. 11.02 million in previous year. The consolidated financials of the Company with its subsidiaries are attached at the relevant part of this Report.


Particulars Unit 2022- 23 2021- 22 Change over previous year Reason for material change
Debtors Turnover Times 5.64 6.21 -9.08% Trade receivable have increased more in proportion to increase in revenue, resulting in lower debtor turnover ratio.
Inventory Turnover Times 5.29 4.81 10.01% Inventory turnover ratio improved due to similar level of inventory despite increased cost of goods sold and Topline.
Current Ratio Times 1.21 1.20 1.04% Marginal improvement.
Debt Equity Ratio Times 0.50 0.60 -15.90% Debt Equity ratio is substantially improved due to increase in Net worth and reduction in Debt.
Debt Service Coverage Ratio Times 1.38 1.34 3.20% Due to increase in Profit after tax but before interest and depreciation.
Operating Profit (EBIDTA) Margin % 14.94 15.64 -0.70% Minor Change on account of notional impact of steel price increase partly offset by better absorption of fixed cost.
Net Profit Margin % 6.44 5.98 0.46% Net profit margin improved due to decline in finance cost & %age decline in depreciation on increased turnover.
Return on Net Worth % 12.66 11.03 1.63% Improved due to increase in Net Profit.

This notional decline in EBITDA margin has been significantly countered in EBITDA by measures as mentioned below: Internal cost improvements focused on yield and conversion costs to counter cost inflation (tools, oils, consumables and manpower) Managing inflationary impacts through internal efficiency actions and customer actions on recoveries Securing Freight passthroughs from our customers


Our organization is committed to adhering to world-class manufacturing systems, as exemplified by our vision statement. As a result of our dedicated efforts, we have been honoured with recognition and appreciation from our esteemed customers who have consistently supported us. Such customer acknowledgments serve as the most compelling testimony to the excellence of a company.

Our ECOFAC Plants located in Bhiwadi and Manesar are truly exceptional and distinguishable from others in their class. These Plants have achieved the prestigious Platinum category designation bestowed upon them by the Green Building Council. The term ECOFAC represents a sustainable green manufacturing plant. Our Plants embody a comprehensive range of features, encompassing safety protocols, energy and water conservation measures, waste management practices, and more.

By adhering to these principles and incorporating them into our manufacturing processes, we prioritize the well-being of the environment, optimize resource utilization, and ensure responsible waste management. This commitment aligns with our dedication to sustainable practices and underscores our organization s ongoing efforts to achieve operational excellence.

The Company has successfully commissioned a state-of-the-art 3.25 MW Captive Solar Power plant, harnessing the power of renewable energy and reaping the benefits of 7,200,000 units per year. This sustainable initiative has led to a significant reduction in the Company s carbon footprints, reaffirming its commitment to environmental stewardship. These achievements exemplify the Company s dedication to sustainable practices and responsible corporate citizenship.


The Company s core business operations revolve around gears and transmission components, which are subject to a shared set of risks and returns. Consequently, these operations have been consolidated and presented as a single segment in the aforementioned disclosures. However, to provide a comprehensive understanding of the Company s geographic presence, it has been divided into three distinct segments, as reflected in the financial statements. This division aligns with the principle outlined in the applicable Accounting Standard on Segment Reporting, ensuring appropriate financial treatment and disclosure.

By grouping the gears and transmission components as a single segment and presenting geographical segments separately, the Company aims to enhance transparency and facilitate a more accurate assessment of its operational performance across different geographic regions.

The segmentation approach adopted by the Company ensures compliance with regulatory guidelines and provides stakeholders with relevant and meaningful financial information for evaluating the Company s overall performance.


The Company has implemented a robust system of internal controls, accompanied by well-documented procedures, to protect its assets, interests, and resources. In pursuit of enhanced control measures and sustainability. These internal controls provide reasonable assurance regarding the efficiency and effectiveness of our operations, the adequacy of asset safeguards, the reliability of financial controls, and compliance with applicable laws and regulations.

To augment these efforts, a comprehensive internal audit program is in place, complemented by regular reviews conducted by management, and supported by documented policies, guidelines, and procedures. The internal audits are carried out by our appointed Internal Auditors, who directly report to the Audit Committee and the Board of Directors. We are privileged to have M/s. Grant Thornton Bharat LLP, a renowned and prominent assurance, tax, and advisory firm in India, serving as our Internal Auditor. These measures collectively reinforce our commitment to maintaining strong internal controls and ensuring compliance with industry standards and legal requirements.


The Company prides itself on its longstanding history of maintaining harmonious industrial relations since its establishment. It upholds and nurtures a distinctive paternal culture throughout all its operating locations. A comprehensive health and safety program has been implemented, encompassing various initiatives aimed at enhancing the well-being and safety of our workforce and associates. We have also implemented performance measurement systems and skill enhancement programs across the organization. Throughout the reporting period, amicable relations were maintained at all levels within the Company. Further details regarding employee figures and other relevant information can be found in the Directors Report.


This report contains certain statements that the Company believes and may be considered as forward-looking statements. These forward-looking statements may be identified by their use of words like plan , hope , will , expect , aim or such similar words or phrases. All such statements are subject to risks and uncertainties which could cause actual results to vary materially from those contemplated by the relevant forward-looking statements.