Message From


Surinder Paul Kanwar

Chairman & Managing Director

Dear Shareholders,

The past two years have tested the resilience of individuals and businesses at an unprecedented level. It was no different at Bharat Gears. However, despite the odds, we adapted quickly to the evolving environment and bounced back with renewed strength and vigour. I hope this letter finds you in good health, as we leave the challenges behind and gear up for a stronger and exciting future. Your Company has always pursued excellence in technology, efficiencies, product innovation and quality, manufacturing capabilities and customer satisfaction in all these years. And we continue to focus on these areas for sustained growth and expansion.

Review of the economy

FY 2022-23 has been an incredible year for India. India outperformed amongst the world's fastest growing economies and continues to show resilience even as most developed nations faced slowing growth amidst high inflation and geopolitical tensions. The Indian economy posted a growth of 7.2% in FY 2022-23 after delivering 9.1% growth in the previous fiscal. India's improved outlook is attributable to the government's quest for self-reliance and thrust on domestic manufacturing. Its importance got accelerated in the aftermath of pandemic and the Russia-Ukraine conflict, which saw heightened uncertainties globally. Moreover, the 'China Plus One' policy has been gaining momentum as companies seek to diversify their reliance beyond China to other destinations. This has put India at an advantageous position, particularly due its manufacturing prowess, R&D capabilities and availability of low-cost skilled labour.


Along with this, efforts by the Reserve Bank of India (RBI) have led to a sharp improvement in credit growth and the health of the financial sector, robust tax collections, and well-controlled inflation. The Union Budget 2023 has placed strong emphasis on manufacturing and infrastructure creation through increased capital expenditure allocations. All these factors along with digitalisation focus can propel India's economic growth and unlock new opportunities.

Industry Review

In India, the automobile industry made gains in FY 2022-23 from global supply chain rebalancing, strong domestic demand, and push for domestic manufacturing. Demand for PV and MHCV were strong, driven by healthy consumer demand and increased industrial activity. The electric vehicle (EV) segment also saw increased offtake. The groMh momentum of the automotive industry is expected to continue in 2023 despite operating challenges such as supply chain disruptions, high inflation, and input cost pressures. Favourable government policies such as the extension of FAME-II scheme till 2024, multiple Production- Linked Incentive (PLI) schemes, announcement of scrappage policy and rollout of battery swapping policy are likely to aid growth and address short-term challenges. The automotive landscape is undergoing a technological transformation with the advent of e-mobility and advanced auto component products. We are already working on building modern and future- ready solutions to support our customers. Further, India‘s focus on infrastructure creation, agricultural groMh, and farm mechanisation will create significant opportunities in construction equipment and agricultural machinery sectors.

Financial performance in FY 2022-23

There was robust demand from OEMs for the first nine months, demand was subdued in Q4. On the back of this robust demand for majority period of the year, your Company was able to achieve revenue from operations of Z 766.37 crores in FY 2022-23 against Z 729.44 crores in FY 2021-22, resulting into a y-o-y growth of 5%. Operations for FY23 resulted in an EBITDA of Z 54.75 crores vis-à-vis an EBITDA of Z 69.29 crores for FY22. Decrease was largely on account of steep increase in power & fuel cost & major repair work carried out at Mumbra plant. During the year, the Company availed ` 40 crores term loan from Tata Capital Financial Services Limited, which was utilised for repayment of existing term loan and working capital augmentation.

Strengthening efficiencies

At Bharat Gears, we have always been at the forefront of technology trends in the automotive industry. Our relentless focus on innovation has continued to differentiate us from the rest. This has also helped us develop products with prime importance and relevance to our customers. With the right capabilities and strategies, we are fully aligned with the megatrends that will shape our markets and drive future growth. During the year, we have undertaken multiple cost reduction exercises which will result in significant cost optimisation and improvement in margins and profitability. At the same time, our focus on technology upgradation, process innovations, and portfolio expansion remains unabated. Keeping up with the changing times, we are also digitising our operations and enhancing our manufacturing capabilities to improve operational efficiencies. Through retrofitting and refurbishing of machines, we aim to continuously enhance our productivity and efficiency. I am also delighted to state that we are leveraging our relationship with existing and new customers in India and overseas to broaden our product range and strengthen presence and market share. We have developed significant R&D competencies and this, combined with manufacturing prowess, has proved to be an advantage for us as a technology leader and reliable partner in the automotive industry. To stay ahead of the curve, we are exploring opportunities in the emerging segments of electric and hybrid vehicles, small utility machines for small- holding agricultural lands, and heavy construction machinery for infrastructure projects by leveraging our robust capabilities. E-mobility is a mega trend and the future of the automobile industry. We are focussed on developing innovative and future-ready technologies to drive sustainable and clean mobility solutions.

Looking ahead

We are optimistic of a promising future ahead. The macroeconomic factors and geopolitical concerns may pose potential challenges; however, the overall scenario seems improving. Some green shoots are already visible; inflationary pressures and supply chain constraints are showing signs of easing. Your Company is well positioned for consistent and sustainable growth in the coming years on the back of expected recovery in economic activity and automotive industry. We are continuously expanding our product portfolio and technological capacities and capabilities to achieve operational excellence and drive market share gains across all our segments. I take this opportunity to thank all the shareholders, employees, suppliers, and business partners who worked relentlessly to ensure that we continue to serve our customers and create value for all. I am also grateful to our stakeholders who continue to support and engage with us in our journey.

Warm Regards,

Surinder Paul Kanwar
Chairman & Managing Director

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