With consistent growth over the years, India is the fastest growing G20 economy today. Increasing investments and exports, aptly supported by the smooth implementation of the new goods and services tax (GST), have been the major growth engines. By virtue of rising capacity utilization and revival in corporate earnings, investment has revived. Private consumption has suffered from the confidence and employment shocks associated with demonetization. However, a recovery is underway as suggested by the recent rebound in almost all automotive segments. As mentioned in my last year’s address, our government’s dual objective of bringing the unorganised sectors into the tax compliant mainstream and propelling the benefits of economic growth to larger sections of our society have strengthened the foundation of a new india that is already on its way towards a sustained economic growth in the coming decades.
India has been implementing a host of development and growth initiatives to address its upcoming challenges. The Government’s flagship program, ‘Skill India’ has taken robust shape in training and upskilling the country’s employable manpower. The ‘Make in india’, along with the ‘Ease of Doing Business’ in India has not only boosted investment but has also fostered innovation and built best in class manufacturing infrastructure. Given the wave of rapid urbanization, schemes such as Smart Cities and AMRUT are focused towards creating dynamic urban spaces in towns and cities across the Nation. On the infrastructure front, transport and navigation systems are being upgraded with latest facilities leading to better roads and highways, therefore, giving impetus to the automotive sector. The increasing urbanization has as well raised the daily lifestyle requirements of consumers where transportation, be it private or public, is increasingly becoming the lifeline of Indian cities & towns.
The Automotive Mission Plan 2026 aims to propel the Indian Automobile Industry to be a frontrunner in the “Make In India” programme, as it is amongst the foremost drivers of the manufacturing sector. Over the next decade, the Indian automotive sector is likely to contribute in excess of 12% of the country’s GDP and comprise more than 40% of its manufacturing sector. The AMP envisages that the Indian Automotive Industry will grow 3.5-4 times in value from its current output of around Rs 4,64,000 cr to about Rs. 16,16,000 - Rs. 18,88,500 cr by 2026, thereby, constituting almost 50% of the total manufacturing GDP.
The auto industry is currently witnessing rapid adoption of Electric Vehicles (EVs), shared mobility and Bharat Stage VI emission & safety norms. India is aptly placed to leapfrog the conventional mobility model and achieve a shared, electric and connected mobility future by capitalizing on the existing capabilities and building on foundational government programmes and policies. National policies, such as FAME i.e. Faster Adoption for Manufacturing of Electric & Hybrid Vehicles and National Electric Mobility Mission are designed to encourage EV deployment and manufacturing in India.
Your company’s momentum in the EV space has been on the upswing. Keeping to our business vision of having social impact on the environment played a crucial role in the transitioning of the OEM business of your company. I am happy to share with you that your company’s JV with Solaris Bus & Coach, Europe has grown from strength to strength and has successfully launched India’s First 100% Electric Bus ‘ECO-LIFE’ under the aegis of ‘Make In India’. Moreover, the OEM division of your company has taken giant strides in the areas of New Product Development and acquisition of new customers. A stellar representation was made in the Auto Expo 2018 where your company unveiled 3 new products and launched the 100% Electric Bus ‘ECO-LIFE’, unveiled ‘SKOOLIFE’ CNG variant which is targeted at premium schools and ‘CITYLIFE’ CNG Non-AC variant for citybus operations. The ‘CITYLIFE’ CNG bus operation is now the lifeline of citizens and visitors of Noida and Greater Noida, which is being operated by Noida Metro Rail Corporation (NMRC). The bus operations in Noida-Greater Noida was very successful with the fleet availability of over 99.5%. Ministry of Housing and Urban affairs, Govt. of India has conferred a special award to Noida- Greater Noida Bus operations under NMRC during their 10th Urban Mobility Conference cum Expo.
In the auto component space, your company’s focus remains on moving up the value chain by enhancing the product range to cover the entire range of OEM requirements. From intricate parts, chassis & suspension systems and other critical aggregates, your company has added capabilities towards complete cabin building for commercial vehicles. Your company is now poised to undertake a major indigenisation plan of truck & Cv cabins of international quality for global and domestic commercial vehicle players. For the passenger vehicle segment, your company has been catering to the widest range of systems and assemblies as a full service supplier. The portfolio in this segment is expanded by the addition of products like Pedal Box assembly, etc. Your company has bagged the prestigious Pedal Box assembly business from Ford and has, as well, secured new export business from volvo for Europe and Asia.
The year gone by has been aptly rewarding for the Indian automobile industry. The overall vehicle production grew by 14.78% to reach 29.07 million vehicles. The passenger vehicle segment recorded an annual growth of 7.89%, riding on a robust growth of 20.97% in the demand of utility vehicles. Moreover, the sale of commercial vehicles and two wheelers grew by 19.94% and 14.80%, respectively. The overall automobile exports in FY17-18 registered a growth of 16.12%, backed by strong growth of 20.29% in 2 wheeler and 40.13% in 3 wheeler vehicles segments. According to ACMA, the Indian Auto Components Industry would grow to US$ 100 billion by 2020, backed by strong exports estimated to be of US$80-100 billion by 2026, from the current US$ 11.2 billion.
I am glad to report a 13.02% growth recorded in your company’s net profit of Rs. 81.13 crore in FY18. Your company’s net worth as on March 31, 2018 increased by 17.03% to Rs. 417.36 crore reflecting a corresponding increase in the book value per share to Rs. 102.30 as compared to Rs. 87.42 per share in the previous year.
During the year, your company’s Board of Directors considered and approved a scheme of amalgamation for the merger of JBM Auto System (P) Ltd. (subsidiary company) and JBM MA Automotive (P) Ltd. (associate company) with JBM Auto Ltd. The scheme of amalgamation is subject to statutory and regulatory approvals as per applicable laws. The proposed merger would result in achieving business and administrative synergies, consolidation & simplification of the Group structure, cost savings resulting from rationalization of business processes, improved organizational capability arising from pooling of financial resources and maximizing the overall shareholders value by strengthening its core competencies.
At JBM Auto, we have been consistent towards R&D so as to be able to provide complete array of services that encompass design, development, prototyping, testing and validation. we are actively expanding the portfolio to light-weighting parts and alternate materials to meet the emerging needs of safety & emission norms. Our engineering & R&D teams have been trained in Japan and are well versed in the design, development and testing technologies. Your company has also commenced full circle testing facilities for various Japanese, American, European and Indian OEMs by virtue of the world class test lab established recently.
To conclude, I extend my sincere appreciation to the management and the staff of the company for their valued contribution, as always. A big thanks to you, our valued stakeholders. Your faith and trust in our capabilities keeps motivating us to evolve higher and stronger.
I look forward to keep energizing all our stakeholders with a vision to sustain our environment in tandem to scaling-up our capabilities and capacities.
Thank you and Jai Hind.
Surendra Kumar Arya