“The unprecedented events over the past few months and the subsequent lockdown have completely reversed the positive momentum we had started witnessing across some of our key verticals especially in India. On the heels of robust growth over past 3 years, a routine cyclical correction in CV markets in US and Europe was forecasted for CY 2020. This was further accentuated with the Covid lockdowns from early March 2020. The full year performance, especially H2 was impacted by the severe slump across sectors in India & globally as well. Despite the weak operating performance, we have continued to maintain a strong balance sheet which will further strengthen going forward. All our facilities in India and globally have resumed operations in a phased manner since early May 2020, however, with utilization at sub-optimal levels. We continue to support our customers demand globally while also ensuring the safety and well-being of our employees.FY21 has started on a difficult note with the lockdown impacting demand. Automotive production across Commercial & Passenger Vehicles Globally has been severely impacted. However, we expect the PV business to outperform underlying markets. We expect to see good demand traction in several industrial segments barring Oil & Gas sector. We are hopeful that sequentially things will start to improve from H2 FY21, as economies open up & stabilize. Although the current scenario is very different from what we have ever seen before, we are very confident that the company will come out from these difficult times stronger than before. Throughout FY21, the company will concentrate efforts on being nimble yet addressing dynamic demands of our customers, but, with a razor sharp focus on Cash, Cash flow, winning new business and structural cost optimization across, both – fixed and variable costs. The cost optimization initiatives are over and above the steps taken in FY20, benefit of which will be visible from Q2 FY21 onwards. We have used the lockdown to accelerate the process of digitalization across the plant which will result in sharp productivity improvement as we get back to normal production levels. Over the past few years, the company invested over Rs 1,300 Crores in setting up new capacities across forging and machining. Our focus will be on filling up these capacities and generate Free Cash Flow which will be utilized for bringing down gross debt levels over the next 3 – 5 years.
– B.N. Kalyani, Chairman & Managing Director