Dear Shareholders,
What was unthinkable just a smidgen of time ago is the new norm now. The last 12 months has witnessed: a worsening war in Europe, a horrible situation in the Middle East, the resounding return of Donald Trump, an upending of 80 years of norms and conventions, rise of populism in Europe, tension between USA and China, Tariff Terror, reversals of LPG (Liberalization, Privatization and Globalization), fighting between India and Pakistan (comprehensively dominated by India), Pakistan inexplicably in the good books of China and USA, and so many other norm busting, head scratching events that make you wonder whether anybody knows what is going on.
In this cauldron of volatility and uncertainty, stock markets have remained solid and positive, economic growth surprisingly resilient, money markets liquid and affordable, and inflation within bounds. India is the very picture of this “calm in a storm” with solid economic growth and enviable macro-economic, political and social stability. Even the recent pressure of prohibitive tariffs has a feel of a sensible resolution before any severe damage is done.
The Automotive industry grew 4% to reach domestic production of PVs at 5.14 million. Moreover, the auto industry continued its march towards higher value addition in all its models. The real estate segment grew 9.5% as premium properties were in high demand through the year. Home buyers, in particular, became more conscious of the building materials used by the developer, creating a natural pull for quality building materials. Auto Glass SBU posted sales of ₹2,990 crores with an EBIDTA of 16%, recording a growth of 13% in sales and 12% in EBIDTA from last year. While this is passable, we need to do better for a good ROCE in a capital-intensive business. Some improvement can be achieved by better operational excellence and the rest with scale effects as demand catches up with investments already made.
There were some notable achievements in our Auto business:
Start of our float furnace in Soniyana. This is AIS’s largest single investment which suffered a few startup problems and is now fully on stream. This Auto quality float plant has multiple benefits of: vertical integration, localization, inventory optimization, scale economies and anti-fragility.
Start of assembly operations at MSIL complex at Kharkhoda, Haryana. This is a state-of-the-art facility with an array of VR, AR, 4.0, ML, MES and full stack digitalization technologies employed.
Continued brown field investments in Patan, Chennai and Bawal. After completion of Phase 2, Phase 3 is now under implementation in Patan and, further, Phase 4 has been finalized. At the end of this step by step, modular, attuned to market led optimization of capacity, demand, technology and productivity, AIS Patan will be one of largest auto glass factories in the world.
We launched 3 key new products in Auto – laminated door glass, illuminated sunroof and laminated sunroof, and we continue to work on several new value-added products.
AIS continued to win numerous awards and appreciations from its customers like MSIL, Honda, KIA, Whirlpool, and from industry associations like ACMA and CII
Despite better operational performance, Architectural glass SBU was impacted by the downward price impulse emanating from China and Chinese owned float plants in SE Asia. It posted sales of ₹1,267 crs with an EBIDTA of ₹245 crs, recording a sharp decline from last year. We can do much better. Many countries are responding to this imported deflation by adding additional duties to such imports. India too is walking a fine balance between open trade and protection from dumping by a measured, fact-based analysis, based on which anti-dumping duties are being levied on merit. We are hopeful the Indian Glass industry can face any competition which is fair and transparent. If not, we hope remedial measures will be taken as in the past.
Some notable achievements:
Start of our third float glass plant at Soniyana
Cold repair of F2 at Roorkee (from May 25) after 18 years of excellent performance.
AIS successfully developed several new products / coatings like ‘Petal Delight’ and ‘Nova Craft’ under the OPAL Trendz category, and ‘Ecosense Spectra’ and ‘Ecosense Spring Plus’ under the Ecosense brand series. These new products and coatings have been specifically designed and developed for Indian weather conditions and hence is well received by the market.
In an important development we have completed the merger of 3 of our subsidiaries (ADSL, AIA, GX) into AIS Glass Solutions Ltd. This arrangement brings many of our consumer brands in one company (AIS Windows, AIS Windshield Experts, AIS Glass Solutions etc) and further will lead to rationalization of many expenses. We are hopeful this new entity will create a sharp focus on D2C businesses and will be extremely value accretive. We took considerable strides last year in our journey towards sustainability. Enhanced use of renewable power continued across our manufacturing plants. The green hydrogen supplies were successfully commissioned at our green field F3 plant at Soniyana. Conservation of power, water, and use of environmentally friendly practices of “Reduce, Reuse and Recycle” continued across plants. Our roadmap towards net-zero carbon emission is under preparation and I expect the same to be completed during FY 2526. At AIS, we firmly believe that “Green is Green” – sustainability leads to green for environment and green (profits) for the Company as well. FY 25 was the year of the highest capex (₹1,268 crs) in the history of AIS’s 38 years of existence. Along with prior years higher capex, we have now spent about ₹2,500 crs in the last 3 years up to FY 25. The fruits of this labour will now be harvested and the debt of ₹2,530 crs as on 31st March 2025 will be easily managed. If required, AIS will raise funds including by QIP for which shareholders’ approval has already been taken. During the year, we had the following changes at our Board
On his retirement from MSIL / SMC and return back to Japan, Ishizuka san resigned from AIS Board after 8 years. His contribution has been immense and valuable. We wish him a long, healthy and happy life post-retirement. Consequently, we welcomed Mr. Shashank Srivastava as Non-Executive Director on AIS Board. Shashank san has immense knowledge of Indian Auto industry and has been at the helm of MSIL’s Sales & Marketing for several years.
Upon completion of her maximum term as Independent Director, Ms. Shradha Suri resigned from AIS Board. Ms. Suri has been a pillar of strength and great advice to AIS. As a young entrepreneur, Ms. Suri gave many new ideas and thoughts to shape AIS’s business.
We were immensely fortunate to have Lt. Gen. Ravin Khosla join AIS Board as an Independent Director. With over 40 years of stellar service at the Armed Forces, Gen Khosla brings a different and positive perspective to Board deliberations.
Most recently we had Ms. Avanti Birla join our Board as Independent Director. Being a young entrepreneur, Avanti brings rich experience from the consumer and hospitality industries. We welcome Avanti and look forward to her contribution to AIS’s growth strategy.
Based on the financial performance of AIS, the Board has recommended a dividend of ₹2 per share, which is about 13% payout ratio.
With our unshakeable faith in the future of India, we are sensibly optimistic about our economy, the building and auto sectors, value addition, and the impact of rapid technological change. We are poised to capture the many opportunities without risking our basic health and survival. We aim to:
Vertically integrate and be Atmanirbhar
Invest in R&D, D&D and NPD
Develop talent in-house through excellent HR practices.
Get closer to our customers
Do extensive Value addition
Develop scale to achieve QJCI – Quality of Japan at Cost of India
Be Transparent and Honest – See More
Delight our Customers and Shareholders.
With Regards,
Sanjay Labroo
Chairman & Managing Director