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The Hi-Tech Gears Ltd.

BSE: 522073 | NSE: HITECHGEAR |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE127B01011 | SECTOR: Auto Ancillaries

BSE Live

Apr 03, 16:00
73.00 -4.00 (-5.19%)
Volume
AVERAGE VOLUME
5-Day
1,803
10-Day
1,679
30-Day
1,649
60
  • Prev. Close

    77.00

  • Open Price

    73.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Apr 03, 15:32
73.00 -2.55 (-3.38%)
Volume
AVERAGE VOLUME
5-Day
4,237
10-Day
5,132
30-Day
5,035
1,945
  • Prev. Close

    75.55

  • Open Price

    79.85

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Chairman's Speech

Dear Shareholders, We are meeting at a time when the world automobile industry is at a once-in-a-life time crossroad. For most of the last century, the spread of the automobile has virtually heralded the onset of civilization. In developed countries, auto and related economic activity accounts for roughly a fifth of the economy with the automobile industry directly accounting for a tenth of the economy. Even in dirt-poor India, a large part of economic life revolves around the Highway Economy. Thanks to a crushing fuel shortage and a sudden commodity boom, the auto industry is facing a resource crunch on both sides.....in the cost of buying the vehicle and in the cost of running the vehicle. This twin phenomenon will result in discontinuous change in the structure/ composition of the vehicle, and with it, in the structure of the auto industry itself. We are seeing 2 major big trends happening concurrently. White on the one side we see Asia situated at the epicenter of the global shift in demand, production and consumption trends... on the other hand, we are going to see a change in the structure of the automobile industry itself, which includes the developed countries as well. For the global OEs situated in the developed countries, there are twin challenges. On the one hand, they have surplus capacities in the developed countries, no demand, and an expensive currency from which they cannot export; on the other hand, there are these developing countries which have both demand (but at a lower currency-adjusted- price) and the infrastructure available to drive sharp ramp-ups in production capacities. The second challenge is technological. A factors will drive this technology change: i) Re-cyclability, ii) Safety, iii) Emissions control, iv) Noise reduction. This is expected to cost roughly $ 3000 extra per vehicle. However, with the fall in real purchasings power in the US (from rising inflation, falling real wages, and rising cost of real inputs), such a cost push cannot be passed on to the customer. The industry therefore needs to look to redesign its value chain such that it is able to absorb these costs. Besides, the increase in electronics embedded in the car will further add to the cost sheet of the global OE. Put it all together and you get a picture of extreme ferment. This will create both opportunities and threats. Speaking on behalf of the Indian auto component industry, I think our most probable scenario Leans towards opportunity. The Hawk Report talks about clear opportunities for India and China. Collectively speaking, India with its superior engineering services and IT backbone, will score on Analysis ft Simulation, Engineering Animations, Modeling ft Drafting, Tooling Design & Manufacturing, Customization and Automation..... each being a critical differentiator for the 21st century auto industry. For the coming years, place my optimism on the big trends articulated _above. The global OE s are looking to push conventional manufacturing to the Low Cost Countries (LCCs). [ndia will find itself competing with Brazil, Mexico, Turkey, East Europe and of course, China. The country differentiators, besides the local factors outlined above, will be logistics, infrastructure, the amount of friction in international trade (tike port turnaround, etc). Given the increasing presence of FTAs/ RTAs, these factors will play a much bigger role. At the firm level, Quality, ontime delivery, price are hygiene factors and mostly taken for granted. The new differentiators will be traceability (of the product at various stages of production), New Product Development (NPD) and Project Management skills. Warranty issues will play an increasing role in purchase decisions. You will notice that most of these new issues are softer in nature and relate to the companys internal processes, how the company converts knowledge. The focus is shifting from the what to the how. Somewhere in this huge cauldron of opportunities, there will be space for our company. I am optimistic about the recent successes we had with new customers Like Robert Bosch and Cummins. I am happy about the fact that our relationship with Getrag is expanding... In January they added an IPO to the. JV that we have with them. Finally, I most mention that pressure from input costs, I believe that our company will see progress, both in topline and bottomline, over the medium-term. While most people are very keyed up about the autocomp industry, we notice that they often mix up apples with oranges. Have you also faced this flawed perception? Yes. Talking about autocomp industry as one undifferentiated mass is really like bundling apples and oranges. The key drivers of different segments of the auto industry can be remarkably different. For e.g. automotive glass has very different profitability, growth drivers, input issues or capital efficiency from forgings or castings. From an analysts point of view, this makes it a more difficult industry from which to derive generalized conclusions. Each company has to be analysed individually. What are the special features to be considered in tracking your company? Well, firstly our current fortunes are linked more to the two-wheeler industry. Our key customers Hero Honda, HMSI, Yamaha are all major two wheeler players. Further, exports are making up a large chunk of our pie. These exports are mostly in Commercial Vehicles segment, (ie, Diesel Engine applications like engine gears for Cummins, Caterpillar, New Holland and injector flanges for Robert Bosch). While our current financials are heavily impacted by 2 wheeler segment performance, our future prospects are going to be considerably driven by a much wider range of variables, e.g., currency pressures, outsourcing trends, make vs. buy issues in Europe, FTA issues, and of course, the depth of the relationship which we can build with certain key customers/ JV partners. What are your investment plans and how well have you done at exports? We would have invested roughly Rs. 45 crores in the new Manesar Plant, most of which is for exports and for production of Timing Gears. Some of this production will be done for the 2- wheeler business. Exports: in 2004-05, out of a turnover of Rs. 160 crores, roughly Rs. 32 crores were contributed by exports. This year we expect exports to grow by 50%. A big chunk of this growth will come from Robert Bosch. We have new products coming from Robert Bosch for which we have set up a dedicated line for a high volume part. Deemed Exports: We also have sales to New Holland and HM, which are further exported (classified as Deemed Exports). As far as new business is concerned, we have enquiries from virtually every leading player in the industry. The problem is not enquiries, but the ability to service such spectacular growth.