It has been my privilege to serve as the Chairperson of your Company since 2014. I ampleased to report that in the last five years Gabriel India has not only establisheditself as a brand to reckon within India but is also very well poised To be amongstthe top 5 shock absorber manufacturers in the world'.
It is a matter of great pride and satisfaction to note that Gabriel India has improvedits performance and standing in the Indian automotive component Industry year-on-year:delivering innovative Ride Control solutions to our customers and a superior performancewhile ensuring a focus on sustainability. In doing so we have demonstrated resilience towithstand not only market pressures but also difficult economic environment.
Mission Rs. 2000 Cr revenue
Gabriel India has been able to achieve a sustained profitable growth over the last fiveyears and I am extremely proud to announce that it has surpassed the milestone of H2000Cr revenue in FY2018-19 and has reported H2052.37 Cr revenue in FY2018-19 When GabrielIndia set out in 2014 to achieve the ambitious target of H2000 Cr revenue a holisticorganisation wide revamp was needed not only to achieve the target but also to establishthe Company as a world-class manufacturer of ride control products.
In this regard it identified 5 key focus areas i.e. cultural transformationmanufacturing excellence research and development financial robustness and environmentalsustainability while retaining continued emphasis on customer connect and service.
At Gabriel India we simply believe in a culture called People'. In the last fiveyears the Company focused on people-driven and people-centric cultural transformation. Itembarked on various initiatives to not only hire the right talent but also nurture andgroom employees into business leaders through leadership development and mentorshipprogrammes.
This participative culture is the reason for us being recognised among the Top100 India's Best Companies to Work For' by Great Place to Work Institute for the 5thconsecutive year.
Gabriel India has one of the most diversified product portfolio in India and itcontinuously focuses on flexible manufacturing systems and lean production technology tostay competitive. It is one of the first companies to bring in cellular manufacturing inIndia. Over the last few years it is focusing on low-cost automation and high-end roboticassembly lines for productivity improvement and maintaining consistency in quality. Theimpact of these initiatives is evident with Gabriel India being acknowledged by itscustomers for overall improvements in its product quality and performance.
Research and Development
Gabriel India's pioneering R&D journey goes back to the eighties when it startedproduct development for major Indian OEMs. Today its R&D centres are amongst the mostcomprehensive facilities for ride control products in India. The"state-of-the-art" testing and validation equipment specialised softwarepackages and highly trained staff in the centres help the Company to offer the mostoptimal and indigenous products to its OEM customers including the Indian Railways whichhas recognised the Company for its product innovation.
The R&D team is fully aware of the new developments in the auto industry such aselectric cars and is ready with the advanced product technology to meet the marketdemands.
The Company has always followed prudent financial practices. However in order toachieve a sustained growth it realised years ago that there was a need for a strongfinancial foundation. This would support investments in people manufacturing facilitiesand technology to meet the customers' demands.
The Company developed a robust system of Internal Financial Controls' to monitorefficiency of operations and compliance with laws and regulations. This resulted inachieving a robust Balance Sheet continued revenue growth virtually no debt efficientworking capital cycle and stable margins. CRISIL has upgraded the Company's long-termrating from AA - / Positive to AA / Stable for bank loan facilities.
The ANAND Group has always been sensitive towards the environment. All the plants ofGabriel India are known for their greenery and natural ambience. However with increasedfocus on environmental sustainability Gabriel India decided to reinforce environmentalresponsibility in all its processes.
The Company succeeded in building sustainable processes focused on reducing carbonfootprint moderating grid energy consumption and using renewable energy as analternative. It firmly believes that Green Manufacturing' is the way forward. It hasinstalled several green manufacturing technologies such as aqueous based cleaningvariable frequency drives to reduce power consumption and used lean carbon fuels such asLPG and PNG in coating lines. All this is supported by green power generated from solar orwind. This has substantially moderated CO2 emissions and reduced the overall carbonfootprint.
Our performance in FY2018-19
The global economy marginally decelerated in 2018 with only the Asia-Pacific regioncontinuing to remain a bright spot. The Indian economy reported a weaker growth inFY2018-19 over the previous year due to weaker consumer sentiment from the second half ofFY2018-19.
The Indian automobile industry sales grew at around 5.2 % during FY2018-19 comparedwith around 14.8% in FY2017-18. The passenger vehicle segment posted its slowest growth infour years of 2.7%. The 2 & 3 wheelers segment performed reasonably well withthe 3 -wheeler sales increased by 10.3 % and 2- wheeler sales by 4.8 %. The commercialvehicles segment also registered a good growth of 17.5 %. After the initial seven monthsof growth there was a decline in sales on account of tightening liquidity higherinterest rates revised axle load norms and raised insurance premia as well as thegeneral elections.
In this challenging environment most of our Strategic Business Units contributed tothe Company's performance. Gabriel India reported a revenue of H2052.37 Cr in FY2018-19a growth of 13.1 % over the previous year. This represents a creditable achievement and avalidation of the company's investments in new technologies quality culture customeracquisitions and new markets.
The Company's sales growth coupled with a sustained emphasis on operational excellenceresulted in a 3.8% increase in EBITDA from H171.27 Cr in FY2017-18 to H177.8 Cr inFY2018-19. Profit Before Tax (PBT) increased 4.3% from H137.16 Cr in FY2017-18 to H143.05Cr in FY2018-19.
Gabriel India continued to strengthen its engagements with OEM customers and enhancedvisibility in the export markets. It received various accolades like Quality System'award from Honda Motorcycle and Scooter India Theoretical Value Production' andGlobal Award for Excellence' from India Yamaha Motors Gold Consistency' awardfrom Bajaj Auto Cost Competitiveness' award from Suzuki MotorsSustainability' award from Mahindra Zero PPM' Quality' andSafety' award from Toyota Supplier Samrat' award from Ashok Leyland andCertificate of Consistency' from Powerdown Australia. It has also received variousindustry awards by Federation of Indian Chambers of Commerce & Industry (FICCI) andAutomotive Component Manufacturers Association of India (ACMA) for Quality Systems andManufacturing Excellence.
It successfully made key business acquisitions both within India and abroad. TheCompany received its first global business order from DAF trucks The Netherlands. Itbecame the first approved Indian supplier for all shock absorber categories to new-ageLinke Hofmann Busch (LHB) Coaches of Indian Railways. It is also working with VolkswagenIndia on their modular design platform called MQB.
Towards a bright future
Even as the short-term appears sluggish the outlook for India the sector and theCompany is optimistic from medium and long-term perspectives.
The growth story in India is marked by strengthening reforms growing prosperitydisposable incomes and lifestyle aspirations. The Indian automotive industry is expectedto experience higher demand in the coming years with increase in need for personalmobility and also launch of automobiles in new models conventional electric andhybrid. Having said this it is to be noted with caution that the current slowdown in theindustry may extend well into the entire fiscal.
In current environment of subdued sales the Company is looking at lowering operatingcosts and optimising manufacturing efficiency. It will continue to collaborate and deepencustomer relationships leverage its proprietary technical knowledge and strengthen itsposition as a ride control solutions provider in India. Globally there is a lot of scopeto expand through exports. It will strategically explore the opportunities in overseasmarkets by leveraging relationships with global OEMs in India and penetrate their globaloperations.
In doing so it aspires To be amongst the top 5 shock absorber manufacturers inthe world' by 2025.
I am grateful for the support extended by all our stakeholders particularly theshareholders in our growth journey. I would like to thank all our customers for reposingtheir trust in Gabriel India and we will further strive to provide them with ultimatecustomer delight. The strategic guidance provided by our Board members has helped GabrielIndia to grow despite external challenges. We will continue to work together in ourendeavour to enhance value for all our stakeholders. I must also acknowledge thecontribution of the ANAND Group and the supporting corporate teams to our growth.
This overview will not be complete without the mention of our employees who have beendedicated in enhancing customer delight deepening our technology on the ground enhancingmarket share and fulfilling their obligations to the society. I have no doubt that we willcontinue to work diligently towards building a world-class organisation and achievingsustainable growth in the years to come. With my best wishes
Gabriel India Limited