Economic Stale of Affairs of India
The year gone by was unique in many ways. First, the crude oil price
surged to $ 150 a barrel, followed by sub-prime crisis. The world
markets tumbled as financial greats like Lehman Brothers came down
crashing. The previous year was also unique as growth in first two
quarters of the world economy was unprecedented. The last two quarters
were equally unique as the world economy shrank by 2.9%. The fall of US
dollar accompanied with historical credit crunch.
Nobody could have imagined that pioneers of capitalistic markets like
US and UK would be resorting to state intervention in the money markets
through stimulus packages of trillions of dollars. Even at this point
of time it is not clear whether these stimulus packages are enough to
revive US and European economies in particular and world economy at
The world automotive industry was, perhaps, worst affected. Severe
credit shortage forced buyers to postpone their purchase of vehicles.
The OEMs across the world were forced to abandon their expansion
programs and resort to cost pruning and labour layoffs. The Chrysler
and GM filed for bankruptcy, though in case of GM it was prepackaged
one. Even Toyota Motors also suffered losses and was also forced to
retook at its strategies. The whole automotive industry was in a
tailspin. The US produced 10.5 mn Vehicles in 2008-09 as compared to 15
mn in 2007- 08. Likewise Europe produced14 mn in 2008-09 as compared
to 17 mn vehicles produced in 2007-08.
India, while fundamentally in a much stronger position, has atso
experienced the impact of these events as they were transmitted through
the trade and capital channels. The strong financial sector insulated
the industry from the global tremors, however credit crunch was felt by
the Indian industry.
The Indian economys robust fundamentals and domestic growth drivers
will impart it the resilience to emerge stronger from this period. The
strong domestic consumption and investment drivers will continue to
support healthy rates of growth
The Indian economy characterized by strong fundamentals, grew at 9% in
07-08. However inspite of the global financial turmoil and recessionary
environment could manage growth rate of 6.7% in the year 08-09. During
current fiscal the Indian economy is expected to grow by 5.5-6.5%.
Industry in India and Hi-Tech strategy for the future
The Indian automotive industry grew @ 2.96 % in the year 08-09. The Two
wheeler industry, due to strong rural demand, had a growth rate of
commercial vehicle industry, due to high interest rates and demand
slowdown, declined by whopping 24%. Presently, the industry is going
through consolidation phase. The large unutilized capacities would play
a crucial role in the current year. The attractiveness of the Indian
markets on one hand and the stagnation of the auto sector in the
markets such as US, Europe and Japan on the other have resulted in
shifting of new capacities and flow of capital to the Indian Automobile
Industry feels that the momentum will continue, since the recovery in
the passenger car, two-wheeler segment and light commercial vehicles
seems to be sustainable, aided by dropping interest rates and better
availability of finance. The Finance Ministers latest stimulus package
announced in the Budget will have positive impact on the overall demand
specially in the rural areas. The momentum will sustain and the best
indicator is the stock market. Besides, it also depends on the
performance of the new Government, which many people believe that it
will do so.
The Indian automotive industry holds significant scope for expansion,
both in the domestic market, where the vehicle penetration level is on
Yne lowet side and in the international market, where India could
position itself as a manufacturing hub. The current level of share,
viz, less than 5% of global production and less than 1% of global trade
also corroborates the potential for expansion in this industry.
The financial year 2008-2009 has ended on a challenging note. Your
Company surpassed the previous year gross turnover and has achieved a
gross turnover of Rs. 32,378.14 Lac (Previous year
31,622.29 Lac), recording an increase of 2.39%. The Net Profit (After
tax) of the Company has decreased from Rs. 982.01 to Rs. 769.36 Lac,
recording a decrease of 21.65% as compared to the previous year as the
sales volume was affected by the global downturn from the third and
The sharp decrease in automobiles demand in US after October 2008, has
led to decreased exports of the company in the second half of the, year
under review. Your Company has export turnover of Rs. 4881.69 Lac as
compared to Rs. 6128.26 Lac in the previous year, registering a
decrease of 20.34%.
In keeping with our philosophy of sharing the gains with our
stakeholders, I am pleased to report that the Directors have made
recommendation of final dividend 15%t.e. Rs. 1.50 per equity share as
compared to 30% paid last year i.e. Rs. 3.00 per equity share.
We, at HGL have demonstrated a Passion to Succeed, and is being
reflected in the leadership position that we are an independent and
reputed transmission manufacturing Company of the country, this is
largely due to the unstinting and relentless dedication of all
weKvb&<;%(ittbaHi-Te.chfajmil^ and am confident that this will only be
surpassed in the years to come.
Before I conclude, I would like to thank all our business partners,
associates and employees for their continuing belief and faith in
Hi-Techs principles, philosophy and endeavors, and being a part of Hi-
Techs growth story. I would like to assure you all that the journey
will continue to be equally exciting and rewarding as we move ahead.
Chairman & Managing Director