The global automotive industry landscape continues to transform and along with itthe auto components industry. With India already cementing its place as a global componentsourcing hub we are well positioned to navigate through the emerging challenges andcapitalise on the upcoming opportunities. Our tradition of pursuing excellence and keepingcustomer at the core remained intact this year as well backed bydetermination prudent foresight and strong business fundamentals.
The synchronised upswing in the global economy that began around mid-2016 suddenlychanged course in the second half of 2018 as the continued momentum in manufacturing andtrade dissipated. Sentiments were further dampened by the hardening of US interest ratesvolatile crude prices along with uncertainty over Brexit and heightened rhetoric aroundprotectionism.
The Indian GDP growth dipped below 7% for full-year 2018-19 after growing at 7.5% inthe first half due to weak industrial output and overall subdued demand. However withthe election overhang now behind us the economy should grow at over 7% going forwarddriven by the governments resolve towards achieving fiscal consolidation andcontinued push for structural reforms.
The Indian automobile industry too had started FY 2018-19 on a positive note supportedby normal monsoon rising rural demand the governments infrastructure push and risein industrial activity. However most vehicle segments witnessed a considerable slowdownin the second half due to higher fuel prices lower financing availability steep priceincrease on account of insurance regulation changes in September 2018.
Driven by determination
It was quite a challenging year for our Company with varied demand and inflationarypressure on raw material cost. This is more pronounced as we were undergoing a turnaroundphase. We countered the challenge by increasing capacity through debottleneckingimproving efficiency and reducing operational costs. Im happy to report double digitrevenue growth which has been highest in past five years.
We have significant positives which helped us in progressing well on the turnaroundplan. Our strong connect and quality performance with customers have helped to wincustomer confidence and support during this phase. We have handled volume ramp up andstrengthened customer engagements. We are also proactively tapping into new non-automotivemarket segments such as Industrial and Marine engines.
Our management worked with determination on meticulously crafted set of turnaroundinitiatives. Old machines and equipment were refurbished to improve process capability andavailability. Initiatives were taken to enhance skills of operators and key resources inthe shop floor. We also augmented corporate and plant management teams to improve theoperational performance. There has been good improvement in capacity utilisation in ourCompany
We are gaining further market prominence with innovative products and customerdelights. We will continue to aggressively defend and improve our market share with Indiancustomers and explore opportunities globally. We are Driven by Determinationand remain confident about our strategy of delivering profitable growth.
Progressing with optimism
The first half of FY 20 appears challenging with slowing demand in most of the vehiclesegments. The anticipated pre-buy on account of transition to BS VI normal monsoon thegovernments continued reforms and infrastructure push are likely to propel growth.We remain optimistic about the evolving opportunities in the auto component industry andthe structural trends remain positive in the long term.
We will continue to invest in R&D and drive innovations to build value-addproducts. We will introduce new technologies in India and tap into opportunities to supplyin export markets.
We are working on various measures to manage cost during this uncertain demandenvironment in the short term. The demand indications from global customers areencouraging to offset any vagaries in demand from Indian customers. The operationalperformance improvement continues to remain a priority and various strategic initiativesare being planned to reduce cost.
We are progressing with optimism on long term market opportunities and determined todrive efficiencies to create value for all our stakeholders. On behalf of the Board ofRane Engine Valve Limited I would like to thank all our stakeholders CustomersEmployees Partners Vendors Bankers Government Communities and most importantly you our shareholders who have been part of this exciting journey.