CAPITALISING ON OPPORTUNITIES
DEAR SHAREHOLDERS,
As we conclude FY24, I am pleased to present the annual report of
Frontier Springs Limited. This year has been a remarkable journey, marked by significant
achievements and strategic advancements across our core business segments. Our commitment
to innovation, operational excellence, and customer satisfaction has enabled us to
capitalise on the robust growth opportunities within the Indian Railways sector, our
primary customer and a vital component of the nation?s infrastructure.
Performance Highlights and Strategic Initiatives
The past year has been transformative for Frontier Springs Limited,
with our revenue reaching an all-time high of Rs 135.42 crores, reflecting a year-on-year
growth of 26.14% from Rs 107.36 crores in FY23. This impressive performance was driven by
strong demand across all our product verticals: Coil Springs, Forging, and Air Springs.
Our strategic focus on enhancing operational e_iciencies and expanding our product
offerings has yielded substantial results, positioning us for sustained growth.
The coil springs division continues to be a cornerstone of our
business, supported by sustained demand from Indian Railways. We have made notable
progress, with the installation of new automated machinery for manufacturing bright bars,
which has improved our operational e_iciency and cleared production bottlenecks. This
year, we have successfully executed substantial orders for air springs, and our status as
a "Regular Source" for Indian Railways has solidified our position in this
high-margin segment. The air springs division?s contribution to our profitability is
expected to grow as we enhance our manufacturing capabilities and expand our market reach.
Our EBITDA for FY24 stood at Rs 20.77 crores, a significant increase of
64.06% from Rs 12.66 crores in FY23, with an EBITDA margin of 15.34%, up from 11.79% the
previous year. This margin expansion was driven by several factors, including soft steel
prices, which enabled us to procure raw materials at lower costs, and strong demand from
Indian Railways, allowing us to secure better pricing for our products. Our Profit After
Tax (PAT) for the year was Rs 12.99 crores, up from Rs 7.24 crores in FY23, reflecting a
growth of 79.42%.
Capital Investments and Future Prospects
Our commitment to growth is further evidenced by our ongoing capital
expenditure projects. We are on track to complete the installation of a 6-tonne hammer,
with trial production expected to commence by the end of Q2 FY25. This investment will
enable us to enter the heavy forgings market, serving diverse industries and enhancing our
product offerings. Additionally, we have committed additional capital to expand our air
springs production capacity, aligning with the robust demand and our strategic growth
objectives.
The Indian Railways sector presents significant opportunities,
bolstered by the government?s ambitious plans for modernisation and expansion. The
recent budget allocation for railway infrastructure underscores the potential for
increased demand for our products. We are well-positioned to leverage these opportunities,
with a strong order book and excellent visibility of future demand.
Our strategic initiatives, coupled with the favourable industry
dynamics, provide a solid foundation for continued success. We are committed to
maintaining our focus on innovation, quality, and customer satisfaction, ensuring that
Frontier Springs Limited remains a leader in the rail components industry.
A Conducive Environment for Growth
The Indian government?s focus on modernising the Indian Railways
is creating a plethora of opportunities for industry players like Frontier Springs
Limited. With the Indian Railways being one of the largest railway network in the world,
the government?s initiatives are aimed at transforming it into a world-class
transport system. The recent budget allocation of Rs 2.62 lakh crore for railway
infrastructure is a testament to the government?s commitment to this transformation.
The government?s vision includes the development of dedicated
freight corridors, the introduction of high-speed trains like the Vande Bharat Express,
and the electrification of railway lines. These initiatives are expected to significantly
boost the demand for advanced railway components, including those manufactured by Frontier
Springs. The transition from conventional rail bogies to ‘Vande Bharat
standards? necessitates an upgrade to air springs, presenting a substantial
opportunity for our company.
Furthermore, the government?s focus on increasing the speed and
e_iciency of freight and passenger trains aligns with our strategic objectives. The
expansion of metro projects and the introduction of new lines are expected to drive demand
for our products, particularly in the air springs and coil springs segments. As a key
supplier to the Indian Railways, Frontier Springs is well-positioned to capitalise on
these opportunities and contribute to the modernisation of the railway network.
The government?s initiatives also include the promotion of private
sector participation and foreign direct investment in the railway sector. This creates a
conducive environment for growth and innovation, enabling companies like Frontier Springs
to expand their market reach and enhance their product offerings. We are committed to
leveraging these opportunities to drive our growth and deliver value to our stakeholders.
A Promising Outlook
Looking ahead, we remain confident in our ability to achieve our
financial targets and deliver sustained growth. Our strategic initiatives, coupled with
the favourable industry dynamics, provide a solid foundation for continued success. We are
committed to maintaining our focus on innovation, quality, and customer satisfaction,
ensuring that Frontier Springs Limited remains a leader in the rail components industry.
The government?s recent budget, with an allocation of Rs 2,62,000
crores towards the transformation of the Indian Railways, including the conversion of
40,000 conventional rail bogies to ‘Vande Bharat standards,? presents a
substantial opportunity. This transition necessitates an upgrade to Air Springs from
traditional coil springs, positioning companies like ours to significantly benefit from
this initiative.
We are highly confident in our future prospects and growth trajectory.
Frontier Springs Limited is committed to accelerating its growth rates and capitalising on
the opportunities ahead, leveraging the government?s ambitious plan to modernise the
Indian Railways.
Gratitude and Commitment
In closing, I extend my heartfelt gratitude to our dedicated team for
their unwavering commitment and to our shareholders for your trust and support. Your
confidence in our vision and capabilities inspires us to strive for excellence and create
lasting value. As we move forward, we remain focused on delivering on our promises and
contributing to the development of the nation?s infrastructure.
With optimism and determination, we look forward to another year of
growth and innovation.
Warm regards,
Kundan Lal Bhatia
CHAIRMAN CUM MANAGING DIRECTOR