According to the Department of Industrial Policy and Promotion (DIPP), India's automobile industry attracted Foreign Direct Investment (FDI) valued at USD 20.85 billion during April 2000-December 2018.

Dear Shareholders,
We are happy to share with you our Annual Report for FY 2018-19. Bharat Gears delivered good performance during the year as we made steady progress in transforming the Company into a leaner and more customer-focussed player. It was indeed an eventful year as we have clocked 16% growth for the year.

Growth Outlook
As per World Economic Outlook (WEO, April 2019), India's economy is projected to have grown by 7.1% as compared to 7.2% in previous year, even as it continued to retain its position as the world's fastest growing major economy, supported by continued recovery of investment and robust consumption. Structural economic reforms such as GST and demonetisation led to positive changes in the key metrics of the economy. Growth is projected to be around 7.3% and 7.5% in FY 2019 and FY 2020 respectively, with investment picking up and consumption remaining strong.

Continued implementation of structural and financial sector reforms with efforts to reduce public debt remain essential to secure the Indian economy's growth prospects. Industrial production has been improving due to stronger growth in manufacturing output. It was supported by growth in output of construction goods and higher production of capital goods.

Global economic expansion decelerated in FY 2018, following a broad-based upswing in cyclical growth. Its momentum has slowed due to trade conflicts, rising interest rates and volatility in the commodity markets. Global growth is projected to decline from 3.6% in FY 2018 to 3.3% in FY 2019 (WEO, April 2019).

India's Auto Sector
According to the Department of Industrial Policy and Promotion (DIPP), India's automobile industry attracted Foreign Direct Investment (FDI) valued at USD 20.85 billion during April 2000-December 2018.

In view of the growing demand, the Indian Government is relentlessly focussed on building world-class infrastructure. It is working towards developing India as a global manufacturing centre and a hub for R&D. It has made significant allocations in Union Budget 2019-20 and the 12th Five-Year Plan towards these initiatives. These are expected to create huge demand for construction equipment, which will translate into greater demand for our products.

Financial Performance
The gross turnover of the Company increased by 16.40% from 514.74 Crores in FY 2018 to 599.15 Crores in FY 2019. The gears business grew by 15.22% in FY 2019 at 523.99 Crores, up from 454.76 Crores in FY 2018. The Company has achieved a net profit of 12.53 Crores, as compared to a net profit of 6.30 Crores in the previous year.

As a result of the strong momentum in the automobile sector, especially in agriculture, a higher demand was witnessed across all the segments. The demand was particularly high from OEMs and overseas customers. The replacement market also posted growth post demonetisation and implementation of GST.

Key Initiatives
We continued to focus on our investment in technology upgradation and process innovations to remain a leader in adopting the latest technology in gear manufacturing. Through retro-fitting and refurbishing of machines, we enhanced our productivity and improved efficiency. Today, these work as our competitive advantages in the marketplace. Further, in order to cater to the ever-growing demand, both domestically and internationally, we continued to invest in our manufacturing capabilities. We have taken up significant capital expansion programmes over the last two fiscals

Enhancing Product Range
During the year, we successfully enhanced our product range with existing customers. Our product range comprises various gears and shafts, along with spiral bevel gears and differential gears. We have also developed multiple CW&P ratios for a new HCV model of one of our key customers. These initiatives are enabling us to increase our presence in the world's top three tractor markets, and also have a positive impact on exports, like ZF Germany and Eaton USA. Your Company has also initiated discussions with new customers for unexplored product types, such as laser hydraulic parts.

Moving Ahead
We remain well-equipped to the cater to the increasing growth opportunities. Our exports, mainly to North American and European Markets, have been growing at a steady rate and enabling us in maintaining volumes in depressed market conditions. We are targeting at becoming a global player with a presence across more countries and an increasing client base.

We are continually striving for continuous product development and innovative methods to enhance our manufacturing capabilities and cater to the stringent quality requirements of our customers.

Going forward, our target is to reduce our dependence on the agricultural segment by exploring business opportunities in other segments. This is aimed at minimising the risk of segment concentration. Towards this aim, we plan to add more business in the Automotive and Construction equipment segments.

Our ability to understand client goals and unsurpassed quality cements us as India's largest automotive gear manufacturer. Today, we are the preferred supplier of automotive gears for heavy, medium & light trucks, utility vehicles, tractors & off-highway vehicles.

Finally, I would like to take this opportunity to thank our bankers NBFCs, business associates and all stakeholders for their faith in Bharat Gears. I would also like to express my gratitude for the valuable advice provided by my colleagues on the Board and the management team.

I would like to convey my appreciation for the staunch dedication of all employees across locations. Last, but not the least, I would like to thank our clients for their unwavering support.

We are constantly endeavouring towards delivering high-quality products with latest technology ensuring qualitative growth and a solid and sustainable future.


Surinder Paul Kanwar
Chairman & Managing Director