About
Kennametal India Ltd
Kennametal Widia India Ltd. (formerly known Widia India Ltd) was incorporated in September 21, 1964. The Company is engaged in the business of manufacturing and trading of hard metal products and manufacturing of capital intensive machines along with fixtures and spares. The Company has its manufacturing facility in Bengaluru and sells product and services through sales and support offices.
Kennametal Widia India Ltd.(formerly Widia India Ltd), promoted by Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik unit of Krupp group, Germany, and Sak Industries, Switzerland. The company's collaborator Meturit, Switzerland, holds 88.16% stake. In 1994, the company was taken over by Cincinnati Milacron, US.
The company's wholly owned subsidiary Widaroc (India) was merged with the company with effect from Jan'95.It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forgings dies for big auto components, etc.
During 2000-01, the company sub-divided its equity share face value of Rs.10/- each into 2 equity shares of Rs 5/- each and the company upgraded the Oil Well Rock Roller Bits.
The company's Mining and Construction Tools business was sold for a cash consideration of Rs.64.9 crores to Sandvik Smith A.B/ its subsidiary with effective from 1, March 2004.
In the year 2005, the name of the company was changed from Kennametal Widia India Ltd to Kennametal India Limited.
During 2004-05, the company has installed the Hard metal and hard metal products with the capacity of 210 MT and the company expanded its installed the capacity of Special purpose machines including accessories by 50 Nos. The installed capacity of Special purpose machines including accessories has increased to 125 Nos.
The name of the Company was changed from Kennametal Widia India Limited to Kennametal India Limited effective from December 23, 2005.
A regrinding center was established in FY11 at Jamshedpur through which the Company added two more regrinding centers at Pune and Gurgaon in FY12.
Kennametal Inc., Promoter of the Company sold Equity Shares in March, 2013, aggregating 28,92,333 of the face value of Rs 10 each, through Offer For Sale (OFS) mechanism, which consequently, increased the public shareholding of the Company from 11.84% to 25% of the total paid up share capital of Company
During the year 2020, the Company launched a range of new products as the 'INNOVATIONs' for the Kennametal brand and 'ADVANCES' for Widia brand. Products such as e-Bore (Digital Boring Solution), Mill 4 12 KT LH version & Slotting program, High Performance SC Drills for Steel (HPX) and Cast Iron (HPR), Machining Solutions for Composites, Milling products for Aero Structures ,PCD Milling and Reamers were included under the 'Kennametal' brand. Under 'Widia' brand, products such as e-Bore (Digital Boring Solution), TDMX, Shoulder milling platforms VSM11 & VSM17, new geometries introduced for Top Cut 4 drills, New victory grade for CI turning WK15CT and 2 new grades for VSM890 High Performance Shoulder Milling Platform were introduced.
The Board of Directors at its meeting held on December 4, 2020 had approved a Scheme of Amalgamation for merger of its Wholly Owned Subsidiary, WIDIA India Tooling Private Limited (WITPL) with the Company, which became effective from the Appointed Date, April 1, 2021.
Kennametal India Ltd
Chairman Speech
"Your Company's growth was driven by strong domestic demand
and the team's commitment to executing strategic initiatives."
B. Anjani Kumar
Chairman
Dear Shareholders,
On behalf of the Board of Kennametal India Limited, I am privileged to
present the 58th Annual Report of the Company for the financial year ended June 30, 2023.
I am pleased to share that your company continued its growth momentum over the previous
year, clocking total sales of Rs 10,771 million which was a growth of almost 9%. The
growth was driven by strong domestic demand and the team's commitment to executing
strategic initiatives. In line with this, we invested in capacity building by establishing
the new master inserts plant within our Bengaluru manufacturing facility, thereby
improving our value to customers in India and abroad.
Global Economy an overview
Following a year that saw the peak of global economic turmoil on the
back of COVID aftereffects and geopolitical tensions, FY 22-23 reeled from the spillover
of these uncertainties and continued to slow down. The surge in commodity inflation,
leading to tightening of global monetary policies have stalled the growth in the major
economies of US and Europe, while the recovery in China has been far more tepid than
anticipated, owing to prolonged lockdowns. As a result, the global economic growth is
expected to drop to around 2.1% in 2023 and marginally improve to 2.7% in 2024 as per
World
Bank estimates. The uncertain situation in the major economies has also
aggravated the headwinds faced by emerging markets and developing economies with rising
debt, elevated inflation rates and multiple other crises. The growth in these economies is
expected to be in the range of 4% in 2023. Further deepening of financial woes raises the
concern of some of even the large global economies heading towards recession.
Manufacturing Sector in India
According to the Index of Industrial Production (lIP) data,
India's industrial output grew by 5.1% in FY 22-23 (financial year ending March
2023), albeit much lower than 11.4% in the previous fiscal which was over a weak base in
FY 21 due to COVID. Growth in industrial production and strong output from manufacturing,
mining and power generation were the key drivers. Continuing the positive trend into the
April- June quarter, IIP went up 5.2% Y-o-Y in May from 4.2% in April and is expected to
moderate to ~3-4% in June.
The capex spends by companies including those from capital-intensive
sectors was on a rise during the year where the total GFAs (Gross Fixed Assets) grew by
16%, reflectingIndia Inc.'s confidence in a stable domestic macro environment, and
healthy balance sheets. In the long term, the IIP is projected to trend around 4.9% in
2024 and 5% in 2025.
India stood out in comparison to the muted growth witnessed by other
major countries, and concluded the fiscalas one of the fastest growing economies in the
world with a GDP of 7.2% during FY 23 (Year ended 31.03.23.). This growth was underpinned
by a surge in private consumption alongside the Government's huge capex push. The GDP
in Q1 FY 24 (April June) is estimated at 7.9%, the bright spots being manufacturing and
construction, with sustained buoyancy in services. This outlook is likely to sustain
through
FY 24 leading to a growth projection between 6-6.5%. The continued
robust service exports and narrowing trade deficit is expected to augur well in helping
the Central government achieve its fiscal deficit target of 5.9% of GDP in FY 24. After
witnessing an elevated inflation in the first half, there was a steep decline and the year
ended at 4.8%, well below the threshold of RBI and forecasted to moderate at 5.1% in the
subsequent year. Overall, India's ability to absorb global shocks has set it on a
trajectory for accelerated growth, though downside risks continue to prevail from external
slowdown.
Performance of the Indian Auto Sector
After two years of slump brought on by COVID, followed by the global
chip shortage issue, the automobile industry bounced back in FY 23 to become a $108Bn (INR
8.7 lakh crore) industry. While the two-wheeler segment grew in volume, the Passenger
Vehicle (PV) segment saw a value growth with shifting preference of consumers towards
higher end vehicle models. The former grew 16.9% in the fiscal, whereas the latter saw a
growth of 26.9% as released by the Society of Indian Automobile Manufacturers (SIAM).
Commercial vehicles topped the chart with 34.3% higher sales over last
fiscal. This overall spike in sales has propelled India to rank first in production of
two-wheelers and third in PVs. While e-mobility increased its share in the pie, the
segment is still at a nascent stage, two-wheelers being the highest contributors. With the
growth indicators expected to remain steady, the domestic automobile industry's sales
volume is expected to grow by 7%-9% during FY 24, mainly driven by commercial and
passenger vehicles. The tractor industry on the other hand, benefitted from conducive
agricultural conditions and farmer prices. Production volumes peaked to more than 1
million units for the first time, while domestic volumes grew 12% according to Tractor
& Mechanization Association (TMA). This growth is expected to moderate in FY 24, owing
to a high base and prediction of below "normal" monsoons.
The auto components industry registered double-digit growth in FY
23 with domestic volumes recuperating to pre pandemic levels and moderation of global
supply chain constraints. The industry revenue is expected to grow 5-8 per cent in FY 24,
touching a revenue figure of over Rs 2.5 lakh crore on increased domestic demand,
premiumization of vehicles, focus on localization and improved export and regulatory
norms.
Financial Performance
Your Company's revenues recorded a total of Rs 10,771 Million in
FY 23 showing a growth of 8.7% over the prior year, and the Profit before Tax (PBT) was Rs
1176 Million for FY 23, which was 22.9% below the prior year. in merchandise
There was a negative impact on the PBT due to macroeconomic factors and
geopolitical tensions leading to a slowdown in various parts of the world including China
which led to a reduction in our exports from both the Machining Solutions and Hard Metals
Group.
The drop in profitable exports, the underutilsation of capacity during
the year and the expenses connected to the establishment of the new master inserts plant
including the movement of all the machines to the new plant affected our profit before tax
as you can see from the chart above and from the financial statements forming part of this
Annual Report.
Changes to the Constitution of the Board
During FY 23, your Company witnessed one change to the Board
constitution with Mr. Parameshwar Reddy, Non-Executive Director & nominee of
Kennametal Inc., resigning from the directorship of the Company. Mr. Reddy's
resignation from the directorship was consequent to his resignation from the role of
Director-Finance, Asia Pacific, Kennametal Singapore Pte. Ltd. to pursue opportunities
outside of Kennametal. The Board has placed on record its appreciation of the valuable
services & contribution rendered by Mr. Reddy during his tenure as a Director on our
Board. Subsequent to the end of FY 23, the Board appointed Mrs. Kelly Golden Lynch as an
Additional Director on 11th August 2023, based on the recommendation of the
Nomination and Remuneration Committee. Her appointment is also being proposed for approval
by the shareholders in the ensuing Annual General Meeting.
The Board of your Company therefore remains well-constituted with
optimal representation of experts from various realms that adheres to all governance
norms.
Corporate Governance & Environment, Social and Governance (ESG)
Corporate governance is an essential part of decision making and
conducting business at Kennametal. While ensuring governance, your Company is always
committed to safety, ethics and the wellbeing of all its stakeholders as part of its ESG
initiatives. During the year under review, your Company has for the first time published
the Business Responsibility and Sustainability Report that enlists various ESG initiatives
of your Company. I am proud to state that many of these ESG initiatives were started and
followed by your company well before they became any kind of a legal or mandatory
requirement as Kennametal highly values these initiatives and actions forming part of its
Environment, Health and Safety (EHS) & ESG policies.
CSR: Corporate Social Responsibility
During FY 23, your Company's CSR initiatives have been centred
around the three long standing focus areas of (i) Protecting our Planet (ii) Tech
Education as part of Promotion of Education and
(iii) Kennametal in the Community. The Company has spent Rs 19.22
Million towards projects aligned with these three pillars as part of
its CSR initiatives in FY 23 and met the statutory requirements for CSR expenditure during
the financial year. The Managing Director's report will provide you with more details
on the well planned actions taken under your Company's CSR programme.
Summary and The Way Ahead
Amid a strong domestic demand and the Government's stimulus
towards investments in India, your company delivered a sales growth of 8.7% over the prior
year, registering growth across both Hard Metals and Machine Tools segments. The
Kennametal India team continued to partner with customers and endeavoured to deliver on
our vision to "Transform how everyday life is built". The company registered a
broad-based growth, leveraging opportunities across transportation, aerospace, energy,
engineering, and earthworks.
We continued to deliver on our three-pronged CSR strategy of protecting
our planet, supporting technical education and increasing our involvement in the
community. We intensified our focus on people initiatives by strengthening our safety
practices, driving employee engagement, supporting Diversity & Inclusion initiatives
and building a robust talent pipeline.
As we move into FY 24 which appears to have both opportunities and
challenges, I am confident that our ethical business policies, our dedicated management
team and our robust Balance Sheet, will strongly support your company's profitable
growth. On behalf of the Board of Directors, I would like to sincerely thank all our
employees once again, for their dedication and focus on the Company's goals and
priorities. I would be failing in my duty if I did not acknowledge the significant
customers, distribution partners, vendors and bankers in our growth and success. I would
also like to take this opportunity to thank all the regulatory authorities and our loyal
shareholders for their continued support and encouragement.
Before I conclude, I would also like to sincerely thank my fellow
Board Members for their encouragement and guidance to the management
led by Mr. Vijaykrishnan Venkatesan, our Managing
Director, who along with the Senior Leadership Team has ensured that
your company continues its focus on both business performance and business ethics.
I wish the Kennametal team continued success in all its endeavours in
the years to come. Thank you,
B. Anjani Kumar Chairman
  Â
Kennametal India Ltd
Company History
Kennametal Widia India Ltd. (formerly known Widia India Ltd) was incorporated in September 21, 1964. The Company is engaged in the business of manufacturing and trading of hard metal products and manufacturing of capital intensive machines along with fixtures and spares. The Company has its manufacturing facility in Bengaluru and sells product and services through sales and support offices.
Kennametal Widia India Ltd.(formerly Widia India Ltd), promoted by Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik unit of Krupp group, Germany, and Sak Industries, Switzerland. The company's collaborator Meturit, Switzerland, holds 88.16% stake. In 1994, the company was taken over by Cincinnati Milacron, US.
The company's wholly owned subsidiary Widaroc (India) was merged with the company with effect from Jan'95.It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forgings dies for big auto components, etc.
During 2000-01, the company sub-divided its equity share face value of Rs.10/- each into 2 equity shares of Rs 5/- each and the company upgraded the Oil Well Rock Roller Bits.
The company's Mining and Construction Tools business was sold for a cash consideration of Rs.64.9 crores to Sandvik Smith A.B/ its subsidiary with effective from 1, March 2004.
In the year 2005, the name of the company was changed from Kennametal Widia India Ltd to Kennametal India Limited.
During 2004-05, the company has installed the Hard metal and hard metal products with the capacity of 210 MT and the company expanded its installed the capacity of Special purpose machines including accessories by 50 Nos. The installed capacity of Special purpose machines including accessories has increased to 125 Nos.
The name of the Company was changed from Kennametal Widia India Limited to Kennametal India Limited effective from December 23, 2005.
A regrinding center was established in FY11 at Jamshedpur through which the Company added two more regrinding centers at Pune and Gurgaon in FY12.
Kennametal Inc., Promoter of the Company sold Equity Shares in March, 2013, aggregating 28,92,333 of the face value of Rs 10 each, through Offer For Sale (OFS) mechanism, which consequently, increased the public shareholding of the Company from 11.84% to 25% of the total paid up share capital of Company
During the year 2020, the Company launched a range of new products as the 'INNOVATIONs' for the Kennametal brand and 'ADVANCES' for Widia brand. Products such as e-Bore (Digital Boring Solution), Mill 4 12 KT LH version & Slotting program, High Performance SC Drills for Steel (HPX) and Cast Iron (HPR), Machining Solutions for Composites, Milling products for Aero Structures ,PCD Milling and Reamers were included under the 'Kennametal' brand. Under 'Widia' brand, products such as e-Bore (Digital Boring Solution), TDMX, Shoulder milling platforms VSM11 & VSM17, new geometries introduced for Top Cut 4 drills, New victory grade for CI turning WK15CT and 2 new grades for VSM890 High Performance Shoulder Milling Platform were introduced.
The Board of Directors at its meeting held on December 4, 2020 had approved a Scheme of Amalgamation for merger of its Wholly Owned Subsidiary, WIDIA India Tooling Private Limited (WITPL) with the Company, which became effective from the Appointed Date, April 1, 2021.