Chairmans Message

Dear Shareholders,

The year 2018-19 was strewn with sentiments of growth, in the first half and challenges in the second half. Keeping on course with our vision, we continued channelising our efforts to deliver superior performance. Our investments - technological collaborations and team expertise gathered over years – echo with our vision and mission. These help us prepare better for tomorrow. Last fiscal, we registered a record performance in all key financial metrics. We further strengthened our portfolio by adding new synergistic product lines. Our vision is o transition and offer future ready mobility solutions.

Various factors like increase in cost of ownership and liquidity squeeze led to the slowdown of automotive industry during the second half of last fiscal. However, the Company is cautiously optimistic to regain growth momentum. We anticipate reaping benefits from consolidation and inorganic investment and move to next stage. In a nutshell, the Company will onstantly move towards a new growth trajectory.

During 2018-19, we reported

  1. Revenues of ` 5,908 Cr, an increase of 32% over 2017-18
  2. EBITDA of ` 725 Cr, an increase of 36% over 2017-18
  3. PAT of ` 286 Cr, an increase of 12% over 2017-18
  4. EBITDA margins of 12.3%, expansion of 33 bps over 2017-18

The year 2018 brought along its share of challenges and the fluctuating business cycles. However, on the brighter side, the Indian automobile industry registered a production growth of 6.26% in 2018-19 with 3,09,15,420 vehicles as compared to 2,90,94,447 in 2017-18 (Source:SIAM). Further, the recent introduction of the BS VI, norms for electric vehicles made it compulsory for all auto manufacturers to supply cleaner, safer and sustainable vehicles. Together these factors along with a mix of other reasons like high interest rates with tight liquidity conditions by NBFCs, increased insurance premiums, volatility in exchange rate and oil prices and uncertainty caused by General elections also contributed to a tepid growth.

“We are preparing to cement our position further by entering into new product categories with increased focus on R&D, expecting a revolution in auto world.”

New collaborations, newer possibilities.

This year witnessed new collaboration between us and KPIT Engineering Limited with regards to telematics business. This business deals with telematics hardware product consisting TS-AIS 140 on bus, integrated telematic system compliant to UBS-II specification and telematic products for school buses.

As a strategic priority, our Board has approved merger of Harita Seating Sytems Limited (HSSL). This is the largest of its kind transaction that UNO MINDA has ever undertaken. HSSL is a quality-focused, system-driven organisation that is engaged in manufacturing, product development and sales of driver seats and bus passenger seats. We are hopeful of taking the business to the consequent level while creating value for shareholders of both the companies. Some of the prominent customers of HSSL include TVS Motor Company, Royal Enfield, TAFE, Daimler, John Deere and Tata Motors, amongst others.

It gives us great pleasure to inform you that our JV Roki Minda has successfully qualified in the QAV 1 and 2 audit. This audit is conducted for the development of BS-VI model air cleaner assembly. Simply put, it means that our products are not just BS VI ready, but future ready.

Industry trends

Moving on to some other update in terms of BS-VI norms: our filter and canister business are the only ones in our portfolio to have impacted majorly due to BS-VI emission norms. It gives us great pleasure to inform you that our JV Roki Minda has successfully qualified in the QAV 1 and 2 audit. This audit is primarily conducted for the development of BS-VI model air cleaner assembly for HMSI. Simply put, it means that our filters are BS-VI compliant.

Technology Leapfrog

It is a matter of immense pride for us to inform you that our new R&D center has been established which has dedicated team of more than 150 engineers. This is an important milestone in our journey towards becoming completely self-reliant on the technology front. This will enable us to develop new technologies and products which in turn will help us seize newer opportunities.

Expansion updates

Our new facilities of Alloy Wheels (2W), controllers & sensors under expansion are on track. The civil work for these have started already and are scheduled for commercial production in April 2020.

The high-temperature sensor line (HTS) is under its installation process. It is expected to commission by the end of this calendar year and we are expecting mass production in Q4 of this fiscal FY2020.

We have already received orders for BS VI sensors from leading OEMs. On the other hand, work on cam and crank sensors is also progressing and orders for product and machinery are as per schedule.

In controller division, the plant construction is going on at full swing with its commissioning expected in Q2 of FY2020.

Winning big

During the year, the Company was recognised and conferred with some major awards and accolades. Some of the prominent ones include:

  1. The ‘Most Promising Company of this Year’ award by CNBC TV18 at the Indian Business Leader Awards.
  2. The National Intellectual Property Award for the year 2019 in the category of Top Indian Company Organization for Designs.
  3. Comprehensive Excellence Award from MSIL.
  4. Quality Award from TKML for the lighting division
  5. Quality Excellence Award to MTG and Roki Minda by MSIL.
  6. ‘EY Entrepreneur of this year’ in Manufacturing category.
  7. IR-Magazine award for excellence in Investor Relations.

With a motive of simplifying the Group structure, the board approved the merger of four of its wholly-owned subsidiaries – Minda Distribution and Services Limited, Minda Auto Components Limited, M J Casting Limited and Minda Rinder Private Limited. This scheme will be subjected to necessary regulatory approvals. We expect the exercise to be completed in FY2020.

Consolidating with a purpose

With a motive of simplifying the Group structure, the Board approved the merger of four of its wholly-owned subsidiaries – Minda Distribution and Services Limited, Minda Auto Companies Limited, M J Casting Limited and Minda Rinder Private Limited. This scheme will be subject to necessary regulatory approvals. We expect the exercise to be completed in FY2020. The said merger is expected to bring a lot of operational and strategic synergies and create value for all our stakeholders.

Closing remark

II take this opportunity to thank our Board, Senior Management team and our staff across the organisation for their contribution. Together, we make a thriving and sustainable enterprise. Thanks for your continuous support and trust in us.

Best wishes,
Nirmal K. Minda
Chairman and Managing Director