Dear Stakeholders,
It is with great pleasure that I present to you the Company’s Integrated Annual Report for the calendar year 2023. The year was a truly special year for Schaeffler India, and I am honoured to reflect on the progress and achievements we have made together. In addition to another year of resilient financial performance, we had many firsts to our credit this year. We completed our first acquisition in India, secured wins in the area of future mobility and took further strides in localisation and digitalisation initiatives. The addition of a B2B e-commerce platform in our portfolio presents an ideal synergy for Schaeffler’s future aftersales activities in India. It will be a key enabler for the aftermarket ecosystem, including distribution partners and help to play an important role in the fast-growing and evolving aftermarket digital landscape. With our new project nomination in the area of future mobility, we would be offering a first system-level solution to our customers as we help them transition to a greener future. We continued to leverage on our local strengths and our performance in a challenging environment is a testimony to our perseverance.
Reviewing the operating environment
Despite global headwinds and worsening geopolitical situation, India promises to remain the fastest-growing large economy for another year. In fact, after strong growth in the second quarter of FY2024, the Reserve Bank of India has raised its growth forecast for the year to 7%. In FY25, on the back of the government’s support towards growth, controlled inflation and strong thrust on capital expenditure, private investment and healthy demand conditions, India is expected to continue with a growth trajectory. In the IPSOS index of December 2023, India with 64.3 points was at the top of the index in the world.
The optimism was evident from the automobile numbers. India is now the third-largest automobile market in the world. Indian light-vehicle sales, comprising of cars and light commercial vehicles, will grow to 6.1 million units in 2030 from 4.4 million units in 2022, according to an S&P Global Mobility forecast. The market size of the industry is 7.5 lakh crores and is expected to reach 15 lakh crores backed by economic growth and investment in the national highway network. Over the past few decades, the Indian automotive industry has transformed with technology playing a key role in the massive change. The automotive landscape in India is undergoing a transformation with Indian mobility changing to bigger and greener vehicles driven by regulatory changes.
Within the industrial space - the Indian government’s multifaceted approach to bolstering its infrastructure sector is commendable. The ‘Make in India’ initiative, skill development programs, infrastructure projects, and the ease of doing business reforms are paving the way for a more robust and competitive landscape. The government’s emphasis on the railway sector is seen in a number of projects aimed at updating and enhancing the railways to make them more sustainable and efficient. Achieving the targets for clean energy adoption also remains a focus area with various policies and incentives being introduced to promote wind power development.
Schaeffler India is well placed to capture these opportunities as we introduce and adopt innovative technologies at an even quicker pace, be it our advances in electric mobility, strengthening digitalisation initiatives or offerings of Industry 4.0 solutions.
Throughout the year, we have remained steadfast in our commitment to delivering value to customers, employees, and shareholders. Our strategic initiatives have focused on innovation, operational excellence, and sustainable growth, which have enabled us to strengthen the market position and capitalise on emerging opportunities. It gives me immense pride to share that Schaeffler India today stands strong as a H72,261 mn company and an employee strength of ~3,300 resulting in a market capitalisation of ~H500 bn. This growth is a testament to the dedication and hard work of employees, confidence of stakeholders and a resilient business model.
Empowering change: Our ESG commitment
At Schaeffler, we recognise the importance of integrating sustainability into every business aspect to drive long-term value creation for all stakeholders. Over the past year, we have continued to make significant strides in advancing ESG efforts across all aspects of operations.
We remain dedicated to minimising our environmental footprint and mitigating the impacts of our business activities on the planet. We successfully implemented and executed projects in several key areas. We focused on using renewable energy across all operations and working towards replacing conventional technologies thereby reducing emissions at the plants. Activities on Scope 3 emission reduction included an evaluation of self-assessment questionnaires for ~89% of our suppliers, returnable packaging solutions for ~50% of our customers’ packages, and consolidated distribution centres. We are set on the right track to achieve our ambitious target of being climateneutral in our operations by 2030.
Our commitment to social responsibility extends beyond business operations to the communities in which we operate. Within business operations, we are creating a positive social impact by fostering diversity and inclusion and supporting employee well-being and safety. And on community, we continued to have programmes on water conservation, skill development, enhancing the quality of education in rural India and improving community health to strengthen the social fabric and contribute to the betterment of society. During the year, we received multiple recognitions for Jal Sahara - our initiative to tackle water scarcity through natural resource management.
Sound governance practices are fundamental to maintaining the trust and confidence of our stakeholders. The core principles of corporate governance at Schaeffler India are integrity, accountability, business ethics, effective supervision and creating value for stakeholders. We aim to achieve business excellence through responsible corporate governance, ensuring effective collaboration between the Executive Leadership Team and the Board of Directors, with transparency in corporate and financial communications. We remain dedicated to upholding the highest standards of corporate governance, transparency, and ethical conduct.
As we look to the future, Schaeffler India remains firmly committed to advancing its ESG agenda and integrating sustainability into our business strategy.
In conclusion
Ms. Hardevi Vazirani has recently taken over the reins of Schaeffler India’s finances from Mr. Satish Patel. I am delighted that we are able to find a great fit within the organisation, for such an important position. I thank Satish for navigating us throughout these years and contributing to the growth of our India entity.
I look back at 2023 as a year where we weathered challenges, embraced change, and grew stronger, solidifying our commitment to a sustainable future.
I am deeply grateful for the unwavering support of the Board of Directors. I would also like to extend my sincere appreciation to our employees, esteemed customers and partners for their collaboration, and gratitude to our shareholders. The progress we made goes beyond numbers for fostering innovation, improving operational excellence, and building a more responsible future.
The journey ahead fills us with excitement, as we continue to forge strong partnerships, innovate, and embrace the opportunities that lie ahead. Together, let us embark on this journey of growth and boundless potential. India’s future is bright, and we are honoured to be a part of its narrative.
Eranti Sumithasri
Chairperson
