Vision in Steering and Linkage Division is To be the leader in the domestic steering business and establish global presence; Vision in Die Casting Division is To be a globally preferred supplier of specialized precision light weight components.
Product portfolio consists of Steering and Suspension Linkage Products, Steering Gears, Hydrostatic Steering Systems, Die Casting.
The changing customer’s preference has completely altered the paradigm and the players need to reinvent themselves time and again. Therefore, in order to protect their share and keep margins healthy, while making the most of the opportunity landscape, OEMs across the globe are required to be on their toes all the time. As a preferred supplier to most of these global OEMs, in India and elsewhere in the world, we, at Rane Group, keep our customers at the core of everything that we do everyday, at every single plant, across every single function.
Rane (Madras) Limited (RML) was established in 1929. Our Company is a market leader in the Steering and Linkages business which manufactures manual Steering Gears Products (SGP), Hydrostatic Steering Systems (HSS) & Steering and Suspension Linkage Products (SSLP).
In 2016, Rane Madras Limited acquired the US-based Precision Die Casting Inc and renamed it as Rane Precision Die Casting Inc. (RPDC). RPDC now supplies complex, thin-walled, low porosity, cast and machined aluminum die castings to the automotive industry from its manufacturing facility at Russellville, Kentucky, US.
64% Revenue Mix comes from India – OEM & OES; 14% comes from India – After sales; 22% comes from US OEM markets. US contributes 58% of total export sales.
Steering & Linkage Division (SLD): • The Steering and Linkage business registered a good growth in all vehicle segments. The growth was supported by growth in Passenger Vehicle segment & supply for new businesses for Rack & Pinion Steering gears. • Business had favourable growth in M&HCV segment through share of business increase in existing models and also supply for new models. • In the Farm Tractor segment, the business, not only enhanced its market share on manual steering gears, but also made good breakthroughs in the Hydraulic business with customers and new models.
Die Casting Division (DCD): Improved operational performance of Die Casting business despite marginal decline in revenue because of lower offtake by International customers.
Rane Precision Die Casting (RPDC): The turnaround plan of the overseas subsidiary, RPDC, is work in progress with key emphasis on operations improvement.
The consolidated revenue increased to Rs. 1349 crores – a 17% y-o-y jump. The EBITDA grew by 35% to Rs. 135 crores. The revenue growth was supported primarily by robust growth in India across product segments. The order book of die casting businesses in India and US are still not healthy. The management is focusing on new business development which hopefully will improve the capacity utilization of die casting business in the coming years.
Your Company was able to optimize the capex in FY18 with continuous evaluation of in-house vs outsourcing decision. Our R&D facilities were upgraded to meet the new product requirements of customers. Another initiative was the implementation of PLM (Product Lifecycle Management) to enhance the potency of all the new product developments.
The Company recorded a turnover of Rs. 1,005.29 crores from its steering and linkage products, showing an increase of 28% over previous year. The company achieved a turnover of Rs. 126.62 crores from die casting business, recording 3% decrease over previous year. The Company also achieved a turnover of Rs. 40.69 crores from its auto parts division. The total turnover of the company was Rs. 1,172.60 crores, registering an overall growth of 23% over the previous year.
The Exports business of Steering and Linkages grew significantly during the financial year due to higher volumes in the All-Terrain Vehicle (ATV) segment in North America. We continue to win new businesses in North America and Europe in the various product categories.
The improvement in profits was largely driven by increased volume as also several cost control measures. During the current year the strengthening of INR affected profitability. Improvement in capacity utilization in the steering business resulted in better Return on Capital Employed (ROCE).
In the Steering and linkages business, in spite of the significant growth, all the plants responded well and operated close to 100% of the capacity. There was good support from the supply chain team for the increased volumes.
The Hydraulics unit in Mysuru did well as the volumes increased significantly in both the Hydrostatic Steering Unit (HSS) and the Cylinders. The Hydraulics Business almost doubled this year as compared to the previous year. The supply of Rack & Pinion gears, which had just commenced in the later part of last year in Varanavasi plant, ramped up to full volumes in a short period of time.
The Die Casting business had focused on operational improvement in the areas of new product development, die tool management and enhanced the overall robustness in the manufacturing process. It also improved the production volumes to capitalize on the business of Timing Case Covers, which resulted in increased sales in the domestic market. This has supported to reduce the overall sales gap due to drop in exports.
The operational turnaround of Rane Precision Die Casting (RPDC), North America continues to be a major area of focus. During the current year, volumes declined over last year due to lesser offtake from select customers. We continue with the implementation of “Get Well” plan structured to stabilize and improve operations. Though, there was significant progress made, we continue to face several operational challenges such as delay in new dies, resulting in higher rejections and higher overtime.
The Steering and Linkage business expects to grow through new businesses won in Passenger Car segment and Hydraulics and increase in market share in the Medium and Heavy Commercial Vehicle segment. After Market and Exports will continue to be a focus area to mitigate dependence on the domestic OEM business.
The Diecasting business, having stabilized operations, is now pursuing new businesses to drive growth. Given the lead time required for conversion of the new business, a modest growth is anticipated for the year 2018-19 and better capacity utilization from 2019-20 onwards.
Rane (Madras) Ltd Annual Report 2018