RACL Geartech Limited

**Takeaways from chairman message **

• RACL Geartech achieved annual revenues of ₹42,303.55 Lakhs, a significant increase from last year’s ₹36,734.37 Lakhs.
• EBITDA grew to ₹10,192 Lakhs, marking a 12.4% increase year-over-year.
• The Gajraula Plant became 100% compliant with green electrical energy from January 1, 2024.
• RACL was nominated as a Tier 1 supplier by a German car manufacturer for their Parking Lock Mechanism for electric vehicles.
• They received a nomination from another German customer for supplying gears for pedal-assisted electric bicycle gearboxes.
• The company won First Prize in the Engineering product category for “Highest Export Performance for FY 2022-23” from the UP government.
• Optimistic about maintaining healthy growth in FY 2024-25 and beyond.

Global economy and Indian economy:

• The global economy is showing signs of growth but faces risks from high debt levels and geopolitical conflicts.
• India is poised to become the third-largest economy by 2027, surpassing Japan and Germany.
• India achieved a growth rate of 8.2% for FY 2023-24, driven primarily by government infrastructure investments.
• Challenges include geopolitical tensions, fluctuations in financial markets, trade disruptions, and extreme weather events.

Global automobile industry:

• Projected to grow from USD 29.09 billion in 2023 to USD 42.86 billion by 2032 (CAGR of 4.4%).
• Facing transformations like the shift to electrified powertrains and focus on software differentiation.
• China surpassed Germany in light-vehicle exports in 2022.
• Challenges include declining demand, socio-demographic changes, shift to EVs, and financial pressures on suppliers.

Indian automobile industry:

• Two-wheeler segment leads the market due to growing middle class and young population.
• Achieved record passenger vehicle sales of 393,074 units in January 2024.
• EV market expected to reach US$ 7.09 billion by 2025.
• Government supports 100% FDI through automatic route and has extended the PLI scheme for the sector.

Auto components industry in India:

• Turnover stood at Rs. 2.9 lakh crore (US$ 36.1 billion) in H1 2023-24, with 12.6% revenue growth.
• Exports grew by 2.7% to Rs. 85,870 crore (US$ 10.4 billion) in H1 2023-24.
• Expected to contribute 5-7% to India’s GDP by 2026.
• Focus on sustainable solutions, lightweight materials, and efficient production processes.

Industry Impact:

• Represents 2.3% of India’s GDP and employs over 1.5 million people.
• Consists of businesses of all sizes, from large corporations to small enterprises.

Investment landscape:

• FDI inflow of US$ 35.65 billion from April to December 2023.
• Government aims for 30% of all vehicles to be electric by 2030.

Opportunities:

• Demand for fuel-efficient vehicles in emerging markets.
• Changing lifestyles and consumer preferences driving growth.
• Market expansion into Asian and BRIC nations.

Strengths:

• Ongoing growth of the automobile sector.
• Innovation and technology investments, especially in EVs and alternative fuels.
• Cost management through manufacturing facilities in Asia.

Threats:

• Intense competition in the industry.
• Economic issues like recessions and unemployment.
• Fuel price fluctuations affecting consumer choices.

Weaknesses:

• High consumer bargaining power in a demand-driven market.
• Government regulations impacting growth.
• High employee turnover and difficulty in retaining skilled workers.

Awards and recognition:

• Gajraula plant became 100% Green Electrical Energy compliant.
• First Prize for Highest Export Performance from UP Government.
• Nomination for supplying gears for electric bicycle gearboxes.
• Partnership with BMW Motorrad as title sponsor for GS Trophy India Qualifier.
• Nomination as Tier 1 supplier for Parking Lock Mechanism for electric cars.

Performance overview and key developments:

• Total revenue of Rs 423.03 Crore in FY 2023-24.
• Exports accounted for 73% of total sales, domestic sales 27%.
• Revenue increased by 15.16%, EBITDA by 12.39%, and Profit Before Tax by 4.69% compared to previous year.
• Diversified product portfolio with growth in passenger car and commercial vehicle segments.
• Focus on technological upgrades, skill development, and quality enhancement to meet future mobility challenges.