12.75mm Spine
57TH ANNUAL REPORT 2017-18
J OURNEY TO D IGITAL
51800631_Bharat Forge AR 2018_Cover.indd 1 7/4/2018 7:02:39 PM 12.75mm Spine
51800631_Bharat Forge AR 2018_Cover.indd 2 7/4/2018 7:02:39 PM The new digital age presents tremendous opportunities for innovative manufacturers like Bharat Forge Limited (BFL), and we are preparing to take advantage of this opportunity to create an ecosystem of a digital organization. The aim of digitizing is to create smart factories with integrated IT systems that lead to less down time, create an efficient supply chain, improve processing workflow, and predict preventive maintenance, resulting in increased production capacity, lower cost of production and efficiently meeting customer demand with optimal accuracy.
The focus of the Company is to apply this initiative across the entire value chain and create a cohesive manufacturing ecosystem. This initiative provides substantial potential in helping us further enhance our manufacturing capabilities, efficiency and productivity that will provide us a competitive edge in the global manufacturing environment.
Please refer to Page 3 and Page 25. Follow the instructions for an interactive Augmented Reality Experience. Bharat Forge at a Glance
Bharat Forge Limited (BFL), the Pune-based Indian Operational highlights multinational is a technology driven global leader in metal forming, having a transcontinental presence Strong growth across all geographies on the back of improved end markets serving several sectors, including automotive, and increased customer traction power, oil and gas, construction & mining, rail, marine, aerospace and defence. It is a part of New order wins of ₹700 crores in FY 2018 Kalyani Group - a US$ 2.5 billion conglomerate. Increasing contribution from We are backed by 50 years of experience in Passenger Vehicles by new customer additions and value-added products manufacturing a wide range of high-performance, critical and safety components. We are proud to Strategic investment in Electric have every global OEM in our customer base and Vehicle (EV) start-up Tork Motorcyles to gain technical expertise in EV their faith is reposed in our strong capabilities of powertrain development metallurgical knowledge, design & engineering capability and manufacturing prowess. BFL Opened R&D facility in the UK, in MIRA Technology Park, to develop has transformed itself from being a supplier of components and sub-systems components to a preferred development partner focused on EVs through a concentrated focus on innovation, technology and value addition.
Forging Capacity Employees 6,25,000 MTPA 6,110
Manufacturing Locations Geographical Presence 10 5 countries
2 Company Overview Statutory Reports Financial Statements
Annual Report 2017-18 3 Board of Directors
Standing (left to right): Mr. B P Kalyani, Mr. G K Agarwal, Mr. Amit B Kalyani, Mr. S M Thakore, Mr. S E Tandale, Mr. P C Bhalerao, Mr. Kishore Saletore Sitting (left to right): Mr. P H Ravikumar, Dr. T Mukherjee, Mrs. Lalita D Gupte, Mr. B N Kalyani, Mr. Pratap G Pawar, Mr. Naresh Narad, Mr. Vimal Bhandari
Mr. B N Kalyani Mr. P H Ravikumar Mr. Amit B Kalyani Chairman & Managing Director Independent Director Executive Director Mr. G K Agarwal Mr. Naresh Narad Mr. B P Kalyani Deputy Managing Director Independent Director Executive Director Mr. Pratap G Pawar Dr. T Mukherjee Mr. S E Tandale Independent Director Independent Director Executive Director Mr. S M Thakore Mr. Vimal Bhandari Mr. Kishore Saletore Independent Director Independent Director Executive Director Mrs. Lalita D Gupte Mr. P C Bhalerao Independent Director Non-Executive Director 4 Company Overview Statutory Reports Financial Statements
Corporate Information
Industry 4.0 Lab @ Pune
Bankers Auditors Registered Office Bank of India S R B C & CO LLP CIN: L25209PN1961PLC012046 Bank of Baroda Chartered Accountants Bharat Forge Limited Mundhwa, Pune Cantonment, Bank of Maharashtra Pune 411 036, Maharashtra, India. Canara Bank Dy. Company Secretary Phone: +91 20 6704 2777 / 2476 State Bank of India Fax: +91 20 2682 2163 Ms. Tejaswini Chaudhari HDFC Bank Ltd. Email: [email protected] Web: www.bharatforge.com ICICI Bank Ltd. Axis Bank Ltd. Citibank N.A. Standard Chartered Bank Credit Agricole CIB HSBC
Annual Report 2017-18 5 Chairman & Managing Director’s Message
6 Company Overview Statutory Reports Financial Statements
We continue our determined transformation Dear Shareholders, Economy performance Setting a new benchmark “The pursuit of excellence” If we look at the external landscape, For BFL, the year gone by has been we find global economies have the best year on record, with the is a corporate strategy returned to the path of recovery. highest ever revenue and profitability. that we have always However, an escalating cycle of trade The consolidated income for 2017-18 restrictions and retaliations by major stood at ₹8,358 crore, compared to followed diligently. economies may adversely impact ₹6,396 crore in 2016-17, a growth of growth. Economic activity across 30.7%. PBT before exceptional item and Our challenge has been the world expanded close to 3% in exchange gain/(loss) stood at ₹1,347 to adapt to the changing 2017, making it the best year since crore vis-à-vis ₹839 crore in 2016- the post-crash rebound of 2010, with 17, up 60.5%. On a standalone basis, landscape as swiftly as markets stimulated by low inflation total income surged from ₹3,865 crore possible, while continuing and accommodative monetary policies. in 2016-17 to ₹5,316 crore, a 37.5% Global financial conditions are likely increase. The performance has been to accelerate the growth to remain positive, while strong driven by growth in all our segments engine. It is deeply sentiment will help meet the robust across domestic and international demand, especially in investment and markets. encouraging for me to consumption. On the balance sheet side, we have see every member of Emerging markets in Asia continue to achieved the target of becoming a net our global family rising be the primary growth driver globally. debt free company. We have come a long However, uncertainties surrounding way, from a relatively high-debt company to the challenge and the business environment preclude to a cash-surplus company. As of March making BFL stronger optimism, as monetary easing in 31, 2018, our long-term debt/ equity some countries, protective policies in (net of cash) stood at (0.06). and more sustainable. developed nations and sluggish growth The performance of our overseas of the Chinese economy require close Continuous learning and subsidiaries continues to improve, monitoring. innovation has enabled us driven primarily by a shift towards light Despite challenges, India has weighting, coupled with a focus on to think faster than the demonstrated a resolve to achieve productivity and cost rationalization. industry, evolve smarter fiscal consolidation, complemented by I believe, our subsidiaries are on the wide-ranging and aggressive polices. right track; and will benefit from a global solutions for discerning The economy grew by 6.7% in the trend from steel to aluminium usage, customers and seek newer current fiscal, according to official driven by a need for light weighting. estimates, compared to 7.1% in growth markets across 2016-17. The year 2017 was marked geographies. by several key structural initiatives to ensure sustainable growth. Consolidated Income ₹8,358 CR 30.7% y-o-y growth
Annual Report 2017-18 7 Chairman & Managing Director’s Message
We have been proactively investing in anticipated pace of progress. We are confident of growing this business machines and in enhancing people skills to through new product development realize Industry 4.0 standards. and customer acquisitions. This business has a long gestation period and does take time before seeing any major momentum. metal forming. The transformations Strategic initiatives – Defence components: The also created many ‘first-time-India’ The automotive industry is changing business primarily focuses on milestones. rapidly, and we can take advantage of supplying critical components to opportunities in emerging areas like – 1990s: First Company to set up a various defence agencies. With light weighting, electrification and new 16,000T press in India the Government’s enhanced focus mobility concepts. Instead of being on indigenization, we expect this – Early 2000s: First Company to disrupted, we choose to be a part of business to grow at a healthy pace, take the inorganic route in the this transformation. As a carefully driven by new products and systems manufacturing industry. The deal crafted strategy, during the year, we development. We are making steady also provided us access to global oil fostered new partnerships that enables progress in the business, and we are and gas markets us to be a part of the change. encouraged by the response of the – 2008: First Company to set up defence establishment. – Set up center for Light Weighting state-of-the-art capacity to address Technology (LWT), a fully- – Defence equipment: As you may critical industrial sectors for forgings automated manufacturing facility be already aware, our ambition requirements across Oil & Gas, in Andhra Pradesh. It will design is to become a full supplier of Construction & Mining, Railways, and manufacture components indigenously developed system Aerospace and Defence for automotive and industrial for defence sector, leveraging the applications, with commercial – 2012: First Company to address the metallurgical and metal forming production expected to start global commodities/energy sector skillsets. Your Company has in CY 2019 identified areas, key being artillery – 2015: First Company to be part of and land systems, where we believe – Made a strategic investment of 45% aerospace global supply chain for an opportunity exists for new stake in an Electric Vehicle (EV) critical components. players. The 155mm/52-calibre start-up, Tork Motorcycles Over the next few years, I expect Advanced Towed Artillery Gun – Opened a new research and the Company’s profile to undergo System (ATAGS), jointly designed development facility at MIRA a steady change, driven by the and developed by Bharat Forge Technology Park, UK, a leading following: along with Defence Research and automotive technology park and Development Organisation (DRDO), – Expanding product portfolio: enterprise zone. The center will focus set a world record during firing Our new product pipeline, focused on the development of components at Pokhran. Over the past few on transmission and driveline and sub-systems for EVs years, we have developed a host of components, coupled with the products with a significant level of As we embark upon another investment in Nellore for setting indigenization, with the capability to transformation, I would like to take up the Center for Light Weighting scale up very fast as soon as a major this opportunity to look back at what Technology, is expected to be maiden order comes our way. we accomplished so far; and address a significant growth driver for the key changes we are envisaging the Company. More importantly, over the coming years. The preceding these initiatives will enable further Advancing technology business transformations focused on diversification of the revenue prowess technology up gradation, foraying stream, creating resilience during We continue our endeavour to diversify into new sectors, widening of downturns and manufacture high-quality products customer base, and more importantly, that drive change and sustainability. – Opportunities in aerospace: it resulted in building a sound Our R&D team develops technologies This sector continues to be of knowledge base about metallurgy and to minimize the carbon footprint and importance, despite its slower than 8 Company Overview Statutory Reports Financial Statements
manufacture light-weight products that value each other’s individuality and result in lower energy consumption. For system of beliefs and work together us, innovation is an ongoing process, to enhance their own capabilities. It is helping us explore new ideas and this environment that enables us to deliver transformative solutions. incubate new ideas that can change the future. Smart manufacturing or Industry 4.0 is a key enabler that can help India realise We are re-training more than 2,500 the goals of ‘Make in India’. We have employees on digital manufacturing, been proactively investing in machines artificial intelligence, and machine and in enhancing people skills to realise learning etc. For this, we have set Industry 4.0 standards. up 4 labs including PTC’s ThingWorx Internet of Things (IoT) platform. We have adopted multiple measures Through such retraining initiatives, (light-weighting of components, we are creating new capabilities in our new product development focused people for the future. on the entire powertrain, and emission solutions) to leverage emerging prospects arising from the Progressing further technological upgradation required We will continue to build on our strong to meet the emission norm applicable foundation and achievements, and from 2020. take long and confident strides in our journey. We have strong growth models Investing in people and a streamlined organization. We know where we are heading and, in The collective capabilities of our people great measure, how we are going to have taken us far, and we will continue get there. We continue to enhance and to invest in developing our team to implement our strategies to sequentially sharpen their capabilities and introduce advance our operational framework for industry-leading practices. We are also long-term shareholder value creation. working to instill a corporate culture As our initiatives bear fruit, allowing us that enables teams to take initiatives to leverage new opportunities, we are and explore new opportunities. It is convinced that we can deliver further only through consistent innovation and profitable growth in 2019. empowerment of our people that we will be able to sustain our leadership in I take this opportunity to thank our our focus areas. shareholders for their continued trust and support. I would also like to thank Our people are passionate about all our stakeholders and bankers for thinking ahead of the curve and supporting our vision and initiatives. accelerating the pace of innovation in this period of dramatic change. We Regards,
2,500 Employees Being re-trained on digital B. N. Kalyani manufacturing, artificial intelligence, Chairman & Managing Director and machine learning etc.
Annual Report 2017-18 9 Financial Highlights (Standalone)
Profit and Loss Metrics
Total Revenue EBIT (Excluding other Income) ₹53,160 MN ₹12,695 MN
In ₹ million In ₹ million 53,160 12,695
45,481 11,058 43,338 10,550 38,647 33,993 8,075
6,184
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Profit Before Tax Profit After Tax ₹13,033 MN ₹7,073 MN
In ₹ million In ₹ million 13,033 7,190 6,976 7,073
10,669 10,769 5,851
8,345 3,999
5,835
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
10 Company Overview Statutory Reports Financial Statements
Balance Sheet Metrics
Net Worth Debt Equity Ratio (Net of Cash) ₹46,143 MN 0.20
In ₹ million 46,143 0.43 42,319 0.37
34,957 35,815
26,933 0.24 0.22 0.20
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
ROCE (Net of Cash) RONW 22.5% 17.7%
% % 26.7 20.7 19.6 23.8 17.7 22.5
14.9 17.8 13.0 14.9
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Annual Report 2017-18 11 Journey to Digital
In a world of unprecedented and constant technological disruption, our direction for growth always revolved around transformation of processes, technology, innovation, and unlocking of new opportunities, to drive new growth and deliver new efficiencies.
As we embark upon another journey towards digital transformation, let’s take a moment to dwell upon the progress achieved by the previous 1991 to 1994 transformation undertaken. PHASE 1 The journey has not been a smooth one, but 16,000T Press installation one with lots of turmoil like the 1997 domestic CV collapse, 2008 global financial crisis, 2013 global commodity collapse. It has been about pushing the boundaries. It has always been about Revenue “Last man standing, first man up” and about accomplishing something new and different. ₹2,297 MN In all the phases of growth, the support for the organization’s strategic choices were supplemented by six key capabilities: mission, “You can’t do today’s job with yesterday’s insights, integration, processes, technology methods and be in business tomorrow.” and talent. – George W Bush
Installation of the state-of-the-art press in India enabled BFL to move from hammer technology to advanced press technology and transform from a predominantly India- focused Company to a global supplier with a significantly increased product portfolio and enhanced customer base. Incurring significant capex of more than ₹1,200 million to shift from hammer technology to a more advanced press technology at a time when the Company had a turnover of ₹1,800 million was indeed a transformational decision that helped open the export markets to us in a big way.
Export Revenue Total Revenue ₹29,712 MN ₹53,160 MN 2018 2018 ₹285 MN ₹2,297 MN 1991 1991
12 Company Overview Statutory Reports Financial Statements
BF Aluminiumtechnik (BFAT) Bharat Forge Kilsta (BFK)
2004 to 2005 PHASE 2 Acquisition of CDP, BFK, BFA CDP Bharat Forge (CDP)
Revenue ₹6,358 MN
“Opportunities multiply as they are seized.” – Sun Tzu
As a part of its strategy to increase its global footprint and to be an international player, BFL was aware it would have to proactively pursue international acquisition opportunities. Thus, in 2004, we acquired a German forging company called Carl Dan Peddinghaus GmbH & Co. KG. and CDP Aluminiumtechnik. In 2005, we acquired Federal Forge in Michigan, USA and Imatra Kilsta AB in Sweden as well as its subsidiary, Scottish Stampings Limited. All the acquisitions had complementary production capacities, excellent market synergies, and were key suppliers to marquee global auto majors. These acquisitions gave us a strong customer visibility, geographical reach and a dual- No. of export customers contributing shore supply capability that helped the Company become a more than ₹100 million in revenue global forging company in the real sense. 10 35 2004 2018
Annual Report 2017-18 13 2006 to 2008 2012 to 2015 Baramati and HFD-II KCTI setup and incubation of PHASE PHASE 3 facility setup 4 Defence vertical
Revenue Revenue ₹21,965 MN ₹31,512 MN “Every skill you acquire doubles “If I have the belief that I can do it, I shall your odds of success.” surely acquire the capacity to do it even – Scott Adams if I may not have it at the beginning.” – Mahatma Gandhi From a growth opportunity and as a de-risking strategy, BFL focused on building an entirely new components business, BFL was always perplexed by India’s high dependence with focus on major industrial segments in India and globally. on defence equipment imports in spite of having strong We set up a “Center for Advanced Manufacturing” at indigenous capabilities. By leveraging its strong metallurgical Baramati, Maharashtra, and also an open die forging unit at expertise, advanced manufacturing facilities, and an the existing facility in Mundhwa. This added around 100,000 innovative workforce, the Company developed a range of MTPA to the Company’s forging capacity. components and systems for import substitution. Embarking on setting up a one-of-its-kind facility dedicated KCTI – our resolute commitment to innovation and R&D – has to industrial sectors in India during the Global Financial Crisis been the key enterprise capability that helped us achieve (GFC) crisis helped us to create, deliver, and capture value in competitive advantage. It has performed a critical role in all these sectors when the eventual recovery took place. enabling the organization to find new ways to differentiate and compete. It facilitated our knowledge on new exotic materials and enabled us in new product development across Revenue from Industrials sector sectors, while at the same time helping us to improvise on ₹4,060 MN ₹21,997 MN our present manufacturing processes. 2007 2018 No. of Patents filed: 47
14 Company Overview Statutory Reports Financial Statements
2018 Moving towards technological PHASE 5 changes/transformations
Revenue ₹53,160 MN “Learning & innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” – William Pollard
The aim of the Company is to create an effective business transformation from the traditional products to a wide range of newly developed technologically advanced components and sub-systems. We intend to integrate and align our future strategic businesses with the existing business to differentiate and stay ahead in the industry as we pursue new innovation-driven opportunities that emerge and as we respond to shifting market demands. We strive to separate ourselves from competitors and establish a platform for future growth. BFL focuses on two major aspects. Firstly, fostering an adaptive organisation that embraces new ways of delivering value and strengthening its existing competencies and secondly, continuing to evolve as new technologies arise and future technological disruptions take place.
Annual Report 2017-18 15 Management Discussion and Analysis
About Bharat Forge Economic Review Limited Outlook Bharat Forge Limited (BFL) is India’s Global Economy largest forging company with global In 2017, the cyclical upswing since The global economic growth should manufacturing footprint spread across mid-2016 continued to strengthen, remain strong in 2018, as both India, Germany, Sweden, US and France. and the global economy witnessed advanced and emerging economies The Company has strong metallurgical pickup in growth. According to the enjoy a harmonized upturn. According knowledge, design and engineering International Monetary Fund (IMF), to the IMF, global growth will inch up capability, and manufacturing prowess. the year reported the broadest from 3.8% in 2017 to 3.9% in 2018 and It has transformed itself from being a synchronized global growth upsurge 2019. Corporate capital expenditure supplier of components to a preferred since 2010. The US economy remained should become a more prominent development partner through in robust shape, with growth in GDP, growth driver, inflation is unlikely concentrated focus on innovation, industrial production, and investment to rise much, and central banks will technology and value addition. BFL has holding up well. The US growth forecast reduce liquidity and raise interest rates de-risked its business by broadening has been raised from 2.3% to 2.7% in in response to better growth. Faster the scope of product offerings to 2018 and from 1.9% to 2.5% in 2019. growth in the US, Japan, and China sectors that have a long business cycle. In 2017, the eurozone turned in its would largely drive global growth The Company has transitioned from an fastest pace of growth over the last during 2019. An encouraging trade and engine/chassis supplier to a powertrain decade. Emerging markets contributed investment environment, along with solutions provider. It has presence in to the uptick last year, and many are on easing financial conditions, would also several sectors, including automotive, track to turn in an even better growth impact the global economic conditions. power, oil and gas, construction and performance in 2018. China’s growth mining, defence, railways, marine, and remained robust and well-balanced aerospace. across sectors and across categories of domestic demand.
An encouraging trade and investment environment, along with easing financial conditions, would also impact the global economic conditions.
16 Company Overview Statutory Reports Financial Statements
Indian Economy Business Environment India retained its position as the world’s fastest growing major economy in Automobile Business Outlook the January-March quarter. India’s Positive forecasts in private GDP growth accelerated to 7.7% Global Automobile Industry consumption and corporate in the March quarter – the fastest According to the Euler Hermes Report, investment, fuelled by rising pace of growth in seven quarters. worldwide vehicle sales are forecast incomes and low interest rates, Strong growth in the agriculture, to reach 98.2 million in 2018 (+2.5%) will support new registrations in manufacturing, and construction owing to sales growth in the emerging passenger cars and commercial sectors contributed to the overall markets and developing economies. vehicles in most countries. A further growth. For the full year (2017-18), The auto market is expected to reach acceleration in economic growth GDP expanded at 6.7%. There was a a milestone in 2019, when 100 million across all regions and strong strong rebound in the second half of units are expected to be delivered. But financial conditions are expected the year on the back of a turnaround further growth rates of auto sales will to extend the vehicle sales cycle in investment demand. This was depend on the demand environment in further. The confluence of various reinforced by an acceleration in the advanced economies of the US and technologies and industries with manufacturing, rise in sales growth, European Union (EU) regions, which, the automotive space is creating a pickup in capacity utilization, strong at present, are at high levels. numerous opportunities in the activity in the services sector and a market. record agricultural yield. Technology-driven trends such as 3D printing, autonomous driving, The Goods and Services Tax (GST), connected vehicles, and Electric which was implemented from July Vehicles (EVs) have been transforming 2017, reformed the system of indirect the automotive landscape. Future taxes by streamlining payments and Heavy Commercial Vehicles growth of the automotive industry credit and improving the efficiency of Production Trend (nos) players clearly depends on how well movement of goods across the country. they react to this changing landscape During the year, the Government of and build partnerships to address this 255,590 India took various initiatives to improve CY 2017 change and, at the same time, improve 305,401 the confidence in the Indian economy on the existing technology. and boost its growth. CY 2016 228,347 296,226 Outlook
The outlook for India remains largely CY 2015 323,282 positive, reinforced by robust private 267,280 consumption and public investment, as well as the ongoing structural reforms. CY 2014 297,120 Global demand has been improving, 225,140 which should encourage exports and fresh investments. CY 2013 249,412 238,697
CY 2012 278,720 The Government of India 220,289 took various initiatives to improve the confidence in US Class 8 Trucks the Indian economy and Europe HCV boost its growth. Source: ACT Research, European Automobile Manufacturer’s Association (ACEA)
Annual Report 2017-18 17 Management Discussion and Analysis
Company Review of the Export Auto Indian Automobile Industry Commercial Vehicles Sales Segment The total sales grew by 19.94% during 2017-18 turned out to be a very good April-March 2018, supported by pent- year for the Indian automotive industry Commercial Vehicles up demand post GST implementation, as it almost registered a double-digit The key markets for the Company, stringent execution of overloading growth. India overtook Germany as US and Europe, witnessed good growth norms in select states, as well as the fourth largest global automotive in 2017. With improving industry healthy demand for Medium & Heavy market, right behind China, the US, and fundamentals, increased infrastructure Commercial Vehicles (M&HCVs). The Japan. The growth was mainly driven activities, and strong freight demand, M&HCVs segment saw a growth of by improvement in the rural economy the US Class 8 market reported a 12.48%, while the Light Commercial and moderately due to demonetization- growth of 12% in CY 2017 as compared Vehicles (LCVs) segment grew by influenced low base in the second half to CY 2016. The truck market in Europe 25.42% during the same period. of 2017. also remained strong in CY 2017 on account of high capacity utilization Production in truck fleets and good customer India M&HCV Production Trend The industry produced over 29 million profitability. (nos) vehicles, including passenger vehicles, Revenues from exports in the heavy commercial vehicles, three-wheelers, FY 2018 344,096 commercial vehicle business in FY 2018, and two-wheelers during April-March FY 2017 342,789 at ₹12,807 million, showed a growth 2018. The industry registered of 29.6% as compared to FY 2017, a production growth of 14.78% FY 2016 341,287 outperforming the underlying markets. compared to the 25.3 million vehicles FY 2015 266,971 The increased market share with manufactured during the period of existing customers and increasing April-March 2017. FY 2014 221,699 content per vehicle are the major FY 2013 280,677 reasons supporting growth. Passenger Vehicles Sales The passenger vehicles market saw a FY 2012 384,801 CY 2018 has started on a firm footing growth of 7.89%, with a sale of 3.28 for the US and Europe truck markets Source: Society for Indian Automobile million vehicles in April-March 2018, as witnessed from the strong orders Manufactures (SIAM) majorly led by utility vehicle sales, for the first quarter. The market which itself saw a growth of 20.97%. is expected to stay robust for the Outlook remaining part of the year as well, as fleets continue to add capacity in Diversified segments and the presence support of the dynamic freight growth. of global automotive manufacturers strengthen the sector’s ecosystem in Passenger Vehicles India. This is important as the country The passenger vehicles demand seeks to be the third largest auto continues to be robust globally. In the market by the end of 2020. The sector passenger vehicles market, the focus will benefit from the Government’s on increasing customer penetration and plans to significantly increase allocation moving up the value chain is reaping towards the rural economy and the good dividends for the Company. infrastructure sector, especially Revenues from the passenger car development of roads and highways, segment in exports for FY 2018 showed including the Bharatmala project and a good growth of 22.7% compared to the roads in rural areas. FY 2017. We are witnessing good traction in this segment and focusing on increasing 29 MN the share of passenger cars to the total 2017-18 vehicle production revenue. in India
18 Company Overview Statutory Reports Financial Statements
Newly Installed Fully Automated Press
Company Review of the India Auto Segment
Commercial Vehicles BFL continued to outperform the industry due to a strong focus on new product development and by increasing content per vehicle. While the industry production volumes remained relatively flat, revenues for the Company in FY 2018 from the domestic commercial vehicles business grew by 29% as compared to FY 2017. Also, the Company recorded its highest ever revenues from this segment in a fiscal year. The commercial vehicles industry is expected to see further momentum as India prepares to adopt the BS-6 emission norms before 2020. Moreover, an increased thrust on infrastructure, resumption of mining activities in selected states, strict implementation of the overloading ban, and the Government’s proposed vehicle modernization program will further support the sector.
Passenger Vehicles The Company’s new products are finding increased acceptance in the passenger vehicles market, leading to an increasing share with customers. Revenues from the domestic passenger car segment in FY 2018 have shown a strong growth of 38.5% as compared to FY 2017.