Company registers a net profit of Rs 304 crore for FY23, with annual revenues crossing Rs 10,000 crore mark for the first time.
27 Sep 2023 | 22973 Views | By Ketan Thakkar and Shahkar Abidi
Daimler India Commercial Vehicle, the maker of Bharat Benz has broken into net profit for the first time in more than a decade and a half's presence in the country.
The higher operating leverage thanks to strong offtake in the Indian market and sustained demand in the overseas market ...
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Daimler India Commercial Vehicle, the maker of Bharat Benz has broken into net profit for the first time in more than a decade and a half's presence in the country.
The higher operating leverage thanks to strong offtake in the Indian market and sustained demand in the overseas market meant that the Chennai headquartered German truck maker posted a net profit of Rs 304 crore as against Rs 1 crore nominal loss it had incurred in FY22.
The company had posted a net loss of Rs 421 crore in FY21.
A strong double-digit growth in volumes in FY23 helped Daimler India Commercial Vehicle post a revenue growth of 30%, crossing the Rs 10,000 crore annual revenues mark.
The director's note stated during the year FY23, under review, "The total revenue of the company increased to Rs 10,665 crore from Rs 8,217 crore in the previous year. Your Company made a profit of Rs 304 crore after tax as against a net loss after tax of Rs 1 crore in the previous year."
Since its entry in 2012, Daimler India Commercial Vehicle has invested Rs 10,000 crore in India, its operations were broken even in FY18, and over the last three years, it had posted operating profit, however on a net basis it was still in the red. This is for the time that the company ended a financial year with a net profit of Rs 304 crore.
This profit was made after spending over a couple of hundred crores on R&D activities to cater to both Indian and overseas market products. Interestingly, over the last few years, the global capability centre has been extending services to global operations in Europe, Asia, Africa and Latin America and in the process, has been able to generate some revenues from within the group for services rendered.
A 100% subsidiary of Daimler Truck AG, Germany, DICV invested over Rs 225 crore towards Research and development, underlining that the company has become self-sufficient to meet its future needs.
The annual filing sourced from Tofler stated that because of the R&D activities - DICV has derived benefits on multiple platforms (9-19t and 26-55t) - which are based out of Europe and Japan.
The R&D activities enlisted in the annual report explained "development and calibration of engines with increase in max. torque with the same power is completed. Engine development and vehicle integration is completed."
DICV has already completed the development and testing of High strength cabin, Load body, testing and evaluation for ABS in both, HDT & MDT, and evaluation for the Disc Brakes, unitized bearing and alloy wheel in HDT.
The design and development of the automated gearbox in HDT models and enhanced connectivity and information to customers on product performance are in progress, the report stated.
With capacities running at almost 100 percent, Daimler India is in the process of expanding the capacity at the factory.
The company posted its highest-ever vehicle exports, parts sales, and domestic sales in 2022. The company sold over 29,000 units posting a growth of over 25% in 2022.
In April, Daimler India had stated that 2022 was one of the most successful years for the company since starting its operation in India - this is clearly reflected in the FY23 financials.
DICV had said in 2022 that it crossed the production milestone of 200,000 vehicles (including domestic and exports) and 200,000 transmissions at its Oragadam manufacturing facility. The company recorded its best-ever annual vehicle exports with 11,000 units, best-ever annual part sales (over 245 million parts), and best-ever annual domestic vehicle sales in 2022.
While the company did not give specific financial metrics at the end of 2022, the MD of the company, Satyakam Arya had said, CY2022 was one of the strongest performing years with 37% growth in revenue and 25% growth in sales.
"In just 10 years of our operations in India, having made significant investments in the market since the beginning and steered our way through the complexities the commercial vehicles industry had to tackle in the last decade. Our strong financial and sales performance is in spite of the pandemic heavily affecting commercial vehicle sales in the last three years. We achieved this performance by consistently improving our cost and revenue position."
He reminded that this positive operational performance was achieved having made significant investments in expanding the product portfolio. Arya had added the company launched 10 new models of BharatBenz trucks to offer customers a comprehensive portfolio of tonnage options to select from.
"We are continuing to work diligently on transforming the way we will be doing business in India by investing in Digitalisation, Servitisation, Sustainability, Diversity and Inclusion as the cornerstones of our strategy going forward. We have expanded our R&D operations, have a sharper focus on Diversity, Equity & Inclusion, upskilling & reskilling our workforce, and many such initiatives to meet our vision in the mobility space for the near and medium term,” Arya had said in April.