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Precision Camshafts Ltd.

BSE: 539636 | NSE: PRECAM |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE484I01029 | SECTOR: Auto Ancillaries

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Annual Report

For Year :
2018 2017 2016

Chairman's Speech

Dear Shareholders,

I take this opportunity to thank you all for your continued faith and belief in our Company, and its sincere and hard-working people. We are presenting our 26th Annual Report to you for the year ended March 31, 2018.

FY2018 was marked by the display of a cautious approach at Precision Camshafts, consolidating the momentum initiated in the past years. Through bold decisions, based on our strong convictions and a steadfast commitment, today we have reached a crucial juncture in our journey, towards becoming one of the world''s most admired camshafts company.

Over the years, we have demonstrated an uncanny ability to strike the perfect equation to deliver consistent and sustained value for our shareholders. We were able to do this with the right strategy, the right culture, and the right geographical footprint. Today, we have emerged as a global precision engineering company with strong capabilities, and manufacturing and supplying 8.07 million camshafts (in FY2018) across the world, emerging as the largest independent camshaft manufacturer.

Our Competitive Edges

We are one of the few global camshaft manufacturers with technological capabilities in manufacturing all the types of camshafts - cast iron, ductile iron, hybrid and assembled. Over the past two-and-a-half decades, we created capabilities to supply more than 150 variants of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications. Our technical know-how and experience has enabled us in supplying strategic solutions, catering to the requirements of not only fast-growing economies, but also reaping the benefits of low-cost manufacturing destinations. Our well-spread footprint across geographies also lends us a significant competitive edge in the marketplace.

From Passion Comes Performance

Our passion is to be a world leader in camshafts manufacturing, with mutually beneficial engagements with Original Equipment Manufacturers (OEMs) across the globe. We take pride in transforming ourselves into a preferred development partner of marquee global and domestic OEMs over the years, from just being a supplier of camshafts. It is our solid focus on quality and thrust on improving camshaft technology that led us to this established global position.

Our Financial Performance

During the year under review, exports contributed about 57.5% to our total revenue, while the remaining 42.5% was contributed by India. We earned about 49.5% of our revenue from machined camshafts and the remaining 50.5% from casting camshafts. The proportion of machined camshafts has been gradually increasing, driving up margin expansion and strengthening profitability.

Total Revenue from Operations stood at Rs. 49,836 lakhs (including Other Income and Finance Income), compared with Rs. 43,247 lakhs in the previous financial year. Net profit (before exceptional items) was Rs. 3,475.63 lakhs, compared to Rs. 6,085.36 lakhs earlier. The Board has declared a final dividend of Rs. 1/- per share for the financial year ended March 31, 2018. We project our margins to further improve once the machining camshafts segment achieves higher scale and existing products generate higher sales.

Our Inherent Capabilities

Our state-of-the-art manufacturing facilities and competitive engineering expertise helps grant us a competitive advantage in the marketplace. Our new machining unit with 2.0 million units per year capacity and world-class equipment ranks us as India''s only camshaft manufacturer offering a one-stop solution for different types of camshaft needs. Our most modern and state-of-the-art, cost-optimised production facilities for camshafts is helping us develop an unequalled manufacturing base and a strong and innovative product mix. On the other hand, our alliances with leading global players to manufacture high quality products across a wide range of solutions enable us to improve efficiency and productivity, thus driving on our quality improvement journey.

Our Strategic Tie-ups

A key achievement of the year has been the successful acquisition of three significant businesses -MEMCO Engineering, MFT and EMOSS. These acquisitions have helped the group diversify its product portfolio.

MEMCO manufactures brake components and high pressure diesel injector connectors to marquee global customers Bosch and Delphi, besides high precision instrumentation components for Endress & Hauser.

MFT is engaged into machining of balancer shafts and prismatic parts. This acquisition will facilitate our diversification into new product range catering to European customers and help us gain a platform to participate in the global OEM program.

Similarly, the acquisition of EMOSS will enable us foray into the electric mobility through tailor-made engineering services on electric vehicles and equipment, paving way for electrical mobility markets such as Europe, North America and Australasia. EMOSS specialises in providing end-to-end solutions including research & development, engineering, production, testing, delivery and post-sale services.

These acquisitions will enable us increase our market share in specific products, access a wide customer base, serve as a catalyst in our growth and will augment our customer-focused mission to transform the organisation.

Moving Ahead

Our vision of the future is not limited to our actions on display today. We are continuously exploring alternative newer ways and means to establish new channels of growth and value creation. We have shaped a far-reaching growth strategy to remain on track in the dynamic industry.

These strategies are aimed towards improving our competitiveness, optimising our reach, leveraging our relationships and building better and relevant products for the customers.

We continue to strengthen our position as one of the world''s leading and most highly regarded development partners in the automotive industry. Our singleminded objective is to drive ahead our journey on new product development aligned with emerging technologies, and remain the supplier of choice to customers.

Once committed, our value system dictates that we progress forward with conviction and excellence, to deliver on our promises.

Before I conclude, I once again thank all of you for your continued support and encouragement. We are committed to grow and create more value for all stakeholders with a renewed sense of optimism, confidence and ambition.

With Regards,

Yatin S. Shah

Chairman & Managing Director