annual-report-FY2021

132 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS OUTLOOK - AUTOMOTIVE AND FARM SECTORS Both the Automotive and Farm Sectors strive to sustain protable growth, maintain leadership position in the domestic market and at the same time, explore global opportunities for growth. Simultaneously, your Company continues its focus on achieving cost leadership through focussed cost optimisation, productivity improvements, value engineering, supply chain management, and exploiting synergies between various group businesses. Automotive Business In F21, the pandemic and lockdown resulted in degrowth of the Indian economy for the rst time in 41 years. In H2FY21, the economy saw a sharp revival due to gradual re-opening and pent-up demand for personal vehicles. But since April 2021 we are witnessing a second COVID-19 wave spreading across the country resulting in localised lockdowns. This has resulted in temporary slowdown in the economy; and it is hoped that it will revive fromQ2 F22 onwards. (i) Policies by the Government to boost consumption (ii) Availability and affordability of nance (iii) Sentiment in rural economy - driven by Agri incomes (iv) Aggressive government push for infrastructure led growth As per the Automotive Mission Plan 2026 (AMP 2026) the mid to long-term outlook for the Indian auto industry is positive. Tractor and Farm Equipment Business The mid to long term outlook for the Indian tractor industry is positive. On the demand side, the Agri and rural sector would continue to see good sentiment owing to consecutive good harvest seasons supported by good monsoon and healthy reservoir levels. Timely procurement and continued efforts by the Government of India through rural development sanctions and direct benet transfer schemes has ensured liquidity in the hands of the farmers. With the recent surge in COVID-19 cases across India, economic activities are getting impacted and several states have put curbs on goods movement and non- essential activities leading to questions on the earlier GDP recovery estimate. Although Tractor and Farm Machinery are classied as essential services, there is an element of uncertainty as the challenges remain in the form of disruptions in the supply chain due to logistics and availability of labour. On the international front for the tractor business, your Company has seen positive momentum across the world in spite of pandemic related headwinds and consequent disruptions. Your Company's subsidiaries in the USA, Latin America, Turkey and Japan have all shown improved resilience and marked improvement in operating results. Synergies across regions and businesses continue to grow. While the positive momentum is expected to continue, severe disruptions in the domestic market will impact the ability to serve the export demands. STRATEGY Automotive Sector With an objective to sustain growth, your Company is pursuing several strategic initiatives in all key areas of business. Your Company is going to stay and expand its core of Authentic SUVs. Your Company plans to produce a slew of differentiated, yet mainstream SUVs in the coming years and price them right. Going forward, your Company wants to be known for being "authentic" through unmissable presence, adventure capability, and sustainable, innovative technologies that inspire the spirit of exploration. Your Company continues to invest in technology development and patent acquisitions. Factors that will signicantly impact demand for automobiles in F22 are: Swaraj Division is planning to invest in creating additional manufacturing capacity by setting up a newmanufacturing plant.