New Delhi, India
"The year gone by has been historic for many reasons. Not only did the country give a majority mandate to a single party for the first time in 30 years, they also signaled their rising aspirations and impatience to achieve the same. The Business Fraternity which has struggled with bearish demand is now looking to fulfill the aspirations of the New India and enthusiastically looking upto the government to provide the right signals and impetus to unleash the true growth potential of the Indian Economy". While the new government has stated its intent through many steps being taken to improve the economy and also boost investment, I would like to draw attention to three specific initiatives that may have an impact on the Company in the coming years. The First Initiative is the resolve to Roll out the Goods and Service Tax by April'2016. This can be a big game changer for the industry and it would go a long way to simplify the business and goods movements. The Second Initiative is the "Make in India" Initiative launched by the government. HHLI has been one of early players in setting up manufacturing in India and has generated jobs for thousands of people in the last 30 years of its existence. We are committed to "Make in India" and today are one of the few AC Companies which manufacture the entire range of ACs in India. The Third Initiative is the launch of Smart Cities Project. While this is still in its initial stage and has a long way to fructify, the project can open up lots of possibilities for HHLI for increased need for energy efficient, environment friendly air conditioning in various application areas. With Strong indigenous D & D focus, HHLI is rightly positioned to take advantage of the demand arising in these application areas. While the start has been positive, the Indian Economy is still not out of the woods. Many Companies are still reeling under debt and inflation can rear its ugly head at any given time with increase in the petrol and diesel prices. The Dollar is firming up again and with Import content being nearly half of the total cost; this can have a major impact on the overall operations of the business. In this cautious optimistic environment, it gives me great pleasure to share with you the highlights of the financial performance for 2014-15, which are largely in line with our goals of long term sustainable growth. Gross revenues from operations increased by 42% from ` 11993 Million to 17073 Million. The operating profit for the first time in HHLI History crossed a figure of ` 1000 Million. This has been possible due to strong efforts of the entire Company and I Congratulate the Management team for their confidence and belief in setting audacious goals and then achieving the same. During the year under review, Room Air conditioners segment witnessed a growth of approximately 13% in sales volume terms. Company has achieved growth at 53% in this segment and increased its market share substantially. The Growth came both in the Window as well as Split segments. In Commercial Air conditioners segment, the market of VRF showed a growth of about 14% while the Company achieved a growth of 24% in the segment. In Chillers segment, market has grown marginally over the last year due to slow growth in commercial real estate. This is an emerging business for the Company and the Company intends to grow in this business. The Application based Air Conditioners consists of Solution for the Telecommunication Industry and the Banking Industry. With Telecom Industry aggressively switching to IME Model to reduce operating costs, the Telecom Air Conditioners business would continue to be under stress. The Company has a monopoly in this segment and continues to serve its existing base. The Company has also launched a specialized product for banking industry and is looking to cover the gap of telecom AC through this product line. The Home Appliances segment continues to grow at a good pace but on a small base. The Company is operating in over 300 Ltrs Frost Free Refrigerators Market and Over 7.0 Kgs Front Load Washing Machine Market. While this segment is growing at a good pace, the limited range and limited market addressability make it a small player in the market. The Company is looking to expand the range to address a larger market. In the Years, beginning 2009-10, your Company has continued to invest large amounts in its Facilities and Sales & Service Network to ensure that the Company is well positioned to leverage demand and serve a wide range of customers across product lines. Today, HHLI operates 42 HCS Centers across India in its endeavor to provide the best in class service to the Indian Customers. HHLI will continue to invest with 3-5 years horizon to ensure that the stakeholders enjoy a sustained profitable growth.