Future Outlook of the company
As automobile manufacturers in India are increasingly tapping export potential there is a need to upgrade technology in order to meet the safety and legal requirements.
This will inevitably lead to an increased demand for newer products such as Electronic Diesel Control systems, Anti-lock braking systems, Air bags, etc.
In order to secure business in these areas the Company is closely working with all major automobile manufacturers in India for development and application of these systems.
Despite the poor agricultural output in the financial year 2002-03, the growth in industrial production has been quite good at 6.1% in the period Apr-March 2003 as opposed to 3.3% posted during the same period a year ago.
In addition, the trends in most macro-economic variables such as inflation, interest rates, development of the rupee against the US dollar, foreign exchange reserves position, are all positive.
These strong fundamentals will help the Indian economy to post a GDP growth of over 5.5% in the financial year 2003-04 as against 4.4% achieved in the previous year.
On the other hand there are some key risk factors such as:
(i) the continuing problems in the Middle East;
(ii) tension between India and Pakistan; and
(iii) a second consecutive monsoon failure, which may endanger the achievement of the 5.5% GDP growth in the current fiscal year, forecasted at this point of time.
In the automobile sector, the commercial vehicles and passenger car segments maintained the growth momentum at 34% and 3.6% respectively, in the first quarter of 2003.
However, the slump in the tractor segment continues and is a cause for concern also this year. Overall, the Company recorded a sales turnover of Rs. 576.4 crore for the period Jan-Apr 2003, which accounts for an increase of 18% over the same period in the previous year.
Considering this positive performance but also the uncertainties prevailing in the global economy and its adverse impact on our exports as well as the uncertainties in the domestic market, the underlying sales in 2003 are expected to grow by around 7% only.
On the cost front, recent spurt witnessed in the prices of steel, aluminium, crude oil, fuel and power will exert severe pressure on the profitability of the Company.
The Company will, of course, further intensify its cost reduction measures and pursue other initiatives to counter the adverse impact of the rise in input costs and to maintain its profitability.
In the automotive aftermarket the focus areas include aggressive marketing and promotional initiatives to increase sales turnover, strengthening of 4-wheeler dealer network, increasing the number of 2-wheeler dealers, expanding the product range through introduction of Bosch branded products and further intensification of anti-spurious activities.
Exports continue to be a strategic thrust area for the Company.
Continuous and vigorous efforts are being made to increase the share of exports to 20% of the overall sales turnover of the Company by 2005.
This would mean that the Company must be in a position to continuously offer state-of-the-art products of international quality at a competitive price.
In the Power tools business, our focus will be on gaining additional market share through expansion of product range, superior service levels and offering value for money products.
In the Packaging machines business, the Company plans to further consolidate its position after the successful launch of "Terra 25" packaging machine.
As automobile manufacturers in India are increasingly tapping export potential there is a need to upgrade technology in order to meet the safety and legal requirements.
This will inevitably lead to an increased demand for newer products such as Electronic Diesel Control systems, Anti-lock braking systems, Air bags, etc.
In order to secure business in these areas the Company is closely working with all major automobile manufacturers in India for development and application of these systems.
Despite the poor agricultural output in the financial year 2002-03, the growth in industrial production has been quite good at 6.1% in the period Apr-March 2003 as opposed to 3.3% posted during the same period a year ago.
In addition, the trends in most macro-economic variables such as inflation, interest rates, development of the rupee against the US dollar, foreign exchange reserves position, are all positive.
These strong fundamentals will help the Indian economy to post a GDP growth of over 5.5% in the financial year 2003-04 as against 4.4% achieved in the previous year.
On the other hand there are some key risk factors such as:
(i) the continuing problems in the Middle East;
(ii) tension between India and Pakistan; and
(iii) a second consecutive monsoon failure, which may endanger the achievement of the 5.5% GDP growth in the current fiscal year, forecasted at this point of time.
In the automobile sector, the commercial vehicles and passenger car segments maintained the growth momentum at 34% and 3.6% respectively, in the first quarter of 2003.
However, the slump in the tractor segment continues and is a cause for concern also this year. Overall, the Company recorded a sales turnover of Rs. 576.4 crore for the period Jan-Apr 2003, which accounts for an increase of 18% over the same period in the previous year.
Considering this positive performance but also the uncertainties prevailing in the global economy and its adverse impact on our exports as well as the uncertainties in the domestic market, the underlying sales in 2003 are expected to grow by around 7% only.
On the cost front, recent spurt witnessed in the prices of steel, aluminium, crude oil, fuel and power will exert severe pressure on the profitability of the Company.
The Company will, of course, further intensify its cost reduction measures and pursue other initiatives to counter the adverse impact of the rise in input costs and to maintain its profitability.
In the automotive aftermarket the focus areas include aggressive marketing and promotional initiatives to increase sales turnover, strengthening of 4-wheeler dealer network, increasing the number of 2-wheeler dealers, expanding the product range through introduction of Bosch branded products and further intensification of anti-spurious activities.
Exports continue to be a strategic thrust area for the Company.
Continuous and vigorous efforts are being made to increase the share of exports to 20% of the overall sales turnover of the Company by 2005.
This would mean that the Company must be in a position to continuously offer state-of-the-art products of international quality at a competitive price.
In the Power tools business, our focus will be on gaining additional market share through expansion of product range, superior service levels and offering value for money products.
In the Packaging machines business, the Company plans to further consolidate its position after the successful launch of "Terra 25" packaging machine.