Hercules Hoists Ltd Management Discussions

Industry Structure and Development:

Material handling stands as a cornerstone in the operational framework of all industries. It serves as a catalyst for enhancing productivity through efficient product accessibility, movement, and shipment, while concurrently driving cost savings by minimizing time and mitigating product damages through secure handling practices. Moreover, a robust material handling strategy fosters a culture of safety, safeguarding against both permanent and temporary disabilities. The pivotal role of material handling equipment lies in its ability to streamline operations seamlessly by enabling the seamless movement, storage, and regulation of goods and materials throughout their lifecycle. As a distinguished material handling equipment manufacturer specializing in hoists and cranes, we offer a diverse array of solutions tailored for overhead material handling needs, encompassing lifting, transportation, and storage functionalities. Our solutions are meticulously crafted to optimize operational efficiency and elevate safety standards across various industry sectors, from manufacturing and warehousing to distribution and disposal processes, ensuring a smooth and secure operational journey at every phase.

Our array of product and solution offerings encompasses mechanical hoists such as chain pulley blocks, ratchet lever hoists, and pulling & lifting machines, alongside electric chain hoists and electric wire rope hoists. Additionally, our portfolio includes an assortment of cranes, ranging from electric overhead traveling cranes, gantry cranes to light profile and jib cranes. Complementing these are our storage and retrieval solutions, featuring floor-operated stackers, roll-out racks, among others. These offerings are made available under our esteemed and trusted brands: ‘Bajaj Indef, ‘iStacker, ‘iCrane, and ‘Stier.

The company provides tailored capital equipment and solutions for a diverse range of industries, including automotive, energy, infrastructure, engineering, metals, chemicals, logistics, textiles, and food processing. Our products are designed to meet the needs of organizations of all sizes, from large corporations and EPC projects to independent contractors, serving both private and public sectors.

With manufacturing facilities in Khalapur, Raigad District, Maharashtra, and Chakan, Pune District, Maharashtra, the company ensures efficient production and timely delivery of its products and solutions.

A strong commitment to quality and technology underscores our operations. Our quality systems are certified to meet ISO 9001:2015 standards at both Khalapur and Chakan plants, with additional certifications including ISO 14001:2015 and ISO 45001:2018 at the Khalapur facility. Moreover, our products such as Chain Pulley Blocks, Electric Chain Hoists, and Wire Rope Hoists adhere to ISI and CE standards. Also, the flame-proof variants of our Hoists are Atex certified.

To maintain consistent high-quality production, significant investments have been made in cutting-edge manufacturing equipment. Collaborating closely with a network of trusted suppliers and vendors, we ensure the sourcing of top-quality components and materials. Continual enhancement of our supply chain capabilities underscores our commitment to quality. Our relentless pursuit of technological advancements ensures that we not only meet but exceed the evolving needs and expectations of our valued customers.

The Company has forged a robust distribution and service network across India through our Authorized Business Partners (ABPs) and sub-dealers. Our ABPs are not only our sales partners but also act as service providers to the customers through an established network of Indef Clinics. To further amplify our customer reach for our solution business, direct sales offices have been established in Mumbai, Pune, Delhi, Chennai, and Kolkata. Ensuring impeccable after-sales support, we maintain a dedicated team of service engineers equipped with the latest tools and technology. Regular training sessions and meets are organized for all ABPs, empowering them to gain a deeper understanding of our products and deliver efficient after-sales support. Our firm conviction in prioritizing customer satisfaction drives our actions. To uphold this ethos, we persistently invest in our service network and training programs. By continually enhancing our service capabilities and providing comprehensive training to our teams, we aim not only to meet but to surpass the expectations of our customers. Our unwavering commitment to customer satisfaction serves as the cornerstone of our pursuit of excellence in all facets of our operations.

Opportunities and Threats:

Intrinsic Factors

In 2023, the Company embarked on a rebranding journey, drawing upon the esteemed legacy of the Bajaj Group, which spans 96 years. This endeavor is aimed at augmenting the brand value, symbolizing the Companys sturdy foundation and long-term vision. The new logo for Bajaj Indef encapsulates elements of integrity, honesty, and transparency, serving as a tangible representation of the Companys unwavering commitment to reliability and continuity.

Our products are meticulously crafted to enhance productivity and safety, ensuring a cost-effective ownership experience throughout their lifecycle. We remain dedicated to amplifying our service capabilities through close collaboration with our business partners, delivering top-notch solutions to our esteemed customers.

Recognizing the pivotal role of the digital landscape, we are investing significantly in extensive market research and digital marketing strategies to broaden our market reach. Furthermore, our steadfast commitment to technological advancements, both internally and through external partnerships, underscores our resolve to fortify our market presence, both domestically and internationally. Through these strategic initiatives, we are poised to consolidate and bolster our position as an industry leader.

Extrinsic Factors

The growth of the material handling products industry is intricately tied to the expansion of construction, infrastructure, manufacturing, transport, and shipping activities. With the rapid modernization of industries such as food processing, pharmaceuticals, agriculture, and chemicals, alongside advancements in transportation and warehousing, the demand for material handling systems is poised to soar. As the Indian economy continues to strengthen, there will be a notable surge in demand for manufactured goods, thereby creating significant opportunities for suppliers offering a diverse range of material handling products and services. We anticipate that industry growth will taper down and stabilize to a more sustainable long-term rate, hovering within the range of 7-10%.

Adapting swiftly to evolving environments has been a hallmark of our company over the years, demonstrating our ability to navigate disruptions effectively. Furthermore, we are committed to reducing our import reliance, bolstering our local supply chain, and enhancing our service offerings to meet and exceed customer expectations.

Financial Review / Segment wise Performance:

(Rs. in lakhs)

	FY 2023-24	FY 2022-23	Growth %
Revenue from operations/ segment performance	17,952.51	15,077.08	19.07%
Material Handling Equipment	17,952.51	15,051.52	19.27%
Windmill	-	25.56	-
Earnings before interest, tax, depreciation, and amortization [EBITDA]	5,157.44	3,439.92	49.93%
Profit after Tax [PAT]	3,601.91	10,330.71*	(65.13%)

* Includes profit of Rs. 8696.16 Lakhs on sale of mulund land and loss of Rs. 73.46 Lakhs on sale of windmill.

The revenue from operations of Rs. 17,952.51 lakhs is up by 19.07% as compared to the previous years revenue from operations of Rs. 15,077.08 Lakhs. The profit after tax of Rs. 3,601.91 lakhs, is decreased by 65.13%, as compared to previous years net profit of Rs. 10,370.71 lakhs.

Internal Control Systems and their adequacy:

The Company upholds robust internal control systems tailored to its scale and business operations. In reinforcement of these endeavors, we have engaged a reputable internal audit firm. Oversight of the audit process is diligently conducted by both the audit committee and the Board, ensuring the effectiveness of internal control systems and adherence to regulatory standards.

Our management takes a proactive approach in rectifying any identified gaps or areas for improvement, swiftly implementing corrective measures based on recommendations from both the internal auditor and the audit committee. Through a steadfast commitment to transparency and accountability, we uphold the highest standards of corporate governance, safeguarding the integrity of our operations.

Risks and Concerns:

Every business inherently faces uncertainties stemming from various factors, making risk mitigation and management imperative for success. The Company has implemented a comprehensive Risk Assessment and Management Policy, establishing a dedicated Risk Management Committee in accordance with applicable Regulations. Key risks, including market dynamics (product, price, and competition), competitive pressures (both domestic and international), employee welfare (health and retention), supply chain disruptions (raw material shortages, vendor challenges), and credit risks (outstanding dues recovery), have been identified.

The Company places a strong emphasis on mitigating these risks, consistently undertaking steps to identify, assess, and address potential vulnerabilities. Detailed reports outlining these efforts are presented at both audit committee and Board meetings. This proactive approach enables the Company to effectively manage risks and make well-informed decisions that align with its business objectives.

Business Out-look:

The Companys business is intricately linked to investments in new projects, expansion of existing capacities, and the overall sentiment in industrial production activities. Throughout 2023-24, there was a steady demand from the capital expenditure (capex) industry, buoyed by positive signals from the Government towards capex investment.

Adopting a customer-centric approach, the Company remains steadfast in its commitment to enhancing competitiveness within the market. Placing our customers at the forefront of our operations, we diligently work towards improving supply chain efficiency, optimizing costs, and refining our product portfolio. Moreover, we are actively investing in expanding our presence both domestically and in export markets, ensuring wider accessibility to our products and services.

By prioritizing customer satisfaction and fostering a culture of continuous innovation, the Company maintains confidence in its ability to drive sustained growth and success. The challenges within the business may arise from political instability or government policy changes, geopolitical tensions affecting logistics and metal prices, disruptions in the supply chain, and delays in customer order processing and project execution.

Development in Human Resources / Industrial Relations front:

The Company acknowledges that its people are its most valuable assets and implements various initiatives to train and motivate them. Our ongoing focus remains on attracting and retaining the right talent, providing them with ample opportunities for growth and development. Selected candidates undergo a structured induction program, offering them valuable exposure and enabling them to become significant contributors to the Companys growth trajectory. Industrial relations throughout the year have remained harmonious, fostering mutual development and collaboration.

Cautionary Statement:

Statements in the Management Discussion and Analysis, describing the Companys growth prospects, are forward-looking statements. The actual results may vary, depending upon economic conditions, raw-material prices, government policies, regulations, tax laws and other incidental factors.

	For and on behalf of the Board of Directors
	Mr. Shekhar Bajaj
Dated: 27/05/2024	Chairman
Place: Mumbai	(DIN No. 00089358)