Company Overview

Honeywell Automation India Limited (HAIL) (NSE:HONAUT) is a ~$350 million+ company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It was incorporated in India in 1984 and its registered office in Hadapsar, Pune. HAIL is a leader in providing integrated automation and software solutions, including process solutions and building solutions. It has a wide product portfolio in environmental and combustion controls, and sensing and control, and also provides engineering services in the field of automation and control to global clients. A Fortune India 500 company, HAIL has more than 3,000 employees across India – Pune, Bangalore, Hyderabad, Mumbai, Chennai, Gurgaon, Kolkata, Jamshedpur and Vadodara.1


Honeywell International Inc. headquartered in Charlotte, North Carolina,  is a Fortune 100 technology company that delivers industry specific solutions that include aerospace products and services; control technologies for buildings and industry; and performance materials globally. The company's technologies help aircraft, buildings, manufacturing plants, supply chains, and workers become more connected to make its world smarter, safer, and more sustainable. The Honeywell brand dates back to 1906.


Business Overview

Process Solution

Process Solution business has a wide portfolio of industrial automation products and solutions that help customers operate safe, reliable, efficient, sustainable, and more profitable operations. Honeywell Automation India has the expertise and breadth of resources to execute projects of every size and complexity in the oil and gas, refining, pulp and paper, industrial power generation, chemicals and petrochemicals, biofuels, pharma/ life sciences, and metals, minerals and mining industries. The Process Solutions business had a strong year driven by providing its customers leading technologies from the plant floor to the boardroom as well as comprehensive lifecycle services to ensure more productive and stable operations.

Process Solutions will continue to stay focused on its core strategies to prevail over the economic environment, slow recovery in industrial production growth, and continued competitive pressure in the market. Given the diversity of products and solutions, the company will strive to enhance its performance. As India moves to build energy security, drive gas-based economy, and encourage it of digital solutions, the company is excited about the opportunities that will present themselves soon. Apart from the core markets and solutions the company is well positioned to drive growth in areas such as pharmaceuticals, specialty chemicals, physical security and cyber security. The company is also enhancing its reach and coverage to serve the large and growing mass mid segment in India. To enable its growth in all these areas the company will continue to focus on expanding its local engineering, product development, and manufacturing capabilities.

Building Solutions

Building Solutions business provides automation and control technologies that help make buildings green, safe, and productive. As part of its intelligent buildings suite, it provides building management systems, fire detection and alarm systems, access control systems, video surveillance systems, integrated security systems, and integrated building management systems based on Honeywell's Enterprise Buildings Integrator™. It provides aftermarket services for various control systems as well as comprehensive utilities' operations and maintenance services for mechanical and electrical systems in buildings.

This business continued to demonstrate good results through the year. Its track record in infrastructure, transportation, Smart Cities, information technology, pharmaceutical, Industrial and commercial space verticals helped expand its presence in its markets of interest, while also positioning it well in this space. There has been a continued government funding on building core infrastructure such as airports, metro and railways and safe cities. In the future, value- added services like analytics, energy optimisation, healthcare is expected to be an evolution in critical operator segment. In addition, the company is exploring the opportunities to create India-specific integrated products to cater to different sectors in India.

Building Management Systems

Building Management Systems business is a global leader in the connected buildings space and maintains a leadership position in India with the widest range of building automation technologies. The solutions and products of this business are already present across multiple verticals in India, which include large mission-critical facilities, government infrastructure like airports, stadiums, metro stations, IT, residential, industrial and hospitality buildings. Building Management Systems has a diverse business portfolio comprising of building control solutions and global field devices

Building Management Systems business had a good business year. The portfolio was further enhanced with new product offerings like Mechanical PICVs, Variable Frequency drives and Piston type PRVs. Business will continue to stay focused on its core strategies through commercial excellence levers such as sales deployment, on-boarding, channel excellence and pipeline management. This will ensure that the company continues to grow via its existing product portfolio. Exciting new initiatives such as Connected Buildings and upcoming new product launches will help the company grow in an evolving market.

Sensing and Internet of Things (IOT)

Sensing and Internet of Things (IOT) has multiple diversified customer accounts from Transportation, Aerospace, Medical, Industrial Verticals. This business was focused on market demand and new segment identification during 2019. The Electronic Sensing portfolio which includes board mount Pressure Sensors, Airflow Sensors, Hall ICs, Temperature Sensors etc. helped the business to win in Medical, EVs segment.

Sales team put extra efforts within Railways and Stationary Power segment to generate long team sustainable business for its Packaged Sensors covering Pressure and other critical parameters. The company plans to focus on consolidation of small business accounts to Masters distributors and continue to focus on demand generation during this year. Allowing Company's direct sales team to focus on key account management with a wider portfolio. There is an exciting range of global and locally - developed products that are being introduced in the Indian market. Localisation of Child parts for its transportation accounts for few products like Stalk controls, pressure switches is planned to roll out from Pune for leveraging local manufacturing, better control on supply chain and quality and increased customer satisfaction.

Global Services

Global Services is fostering innovation and engineering the future industries across verticals in Process and Buildings automation by transforming the solutions and services aligned to Enterprise Connected Vision. It provides project engineering services, product customisation, and software development, driving productivity and cost competitiveness to several global Honeywell entities. This includes complete project management, systems design, engineering, sourcing, manufacturing, and testing undertaken at the company's Pune facility.

The company assures “First-Time-Right” quality, built on matured processes and a strong continuous improvement culture. It leverages its Lean thinking, DevOps and automation to assure quality, and responsive customer-centric strategy to enhance customer experience.

This business continues to deliver good results consistently over the years. It has increased its footprint globally through new portfolios, offerings and geographic expansion supporting Honeywell's global growth agenda. Global Services is making investments in talent development and retention strategies in the consultancy space for accelerated growth through newer verticals, Software and IIoT.

Global Manufacturing

Global Manufacturing business focuses on delivering high quality products and project solutions right and fast to India and global market. The company continues to invest in new product introductions, acquiring new customers and adding capacity trough automation and digitization to support growth. The company continues to leverage localisation and other sourcing strategies to improve overall speed of delivery to customer and cost competitiveness. The company is focused on delivering quality product to customers through sustained efforts in area of build in quality and continuous improvement. The Company has recently setup line for face mask production at its Fulgaon factory in view of Covid-19 pandemic.

Global manufacturing continues to deliver good results year on year. Global Manufacturing Project business had a good growth year while the product business showed sustain growth. The company maintains high standards in area of HSE – Health, Safety and Environment compliance.

Honeywell Operating System (HOS)

The company continues to be focused on Honeywell Operating System (HOS) which encompasses end-to-end business system institutionalisation to enable and sustain exceptional growth along with productivity improvements through Total Customer Experience, New Product Introduction, Order to Cash and Integrated Business Planning. The foundation of HOS is Lean/Six Sigma, Order to Cash, Velocity Product Development, Agile CMMI, Honeywell User Experience, Commercial Excellence and Working Capital.

The Pune Fulgaon Factory and Global Services are at Silver level. The company is aspiring for higher level of HOS maturity allowing them to be competitive by improving Total Customer Experience through demonstrating agility of a small company and benefits of the scale of larger organisation, excellence in Key Business Processes, Functional Transformation and Foundational initiatives.


Industry Overview


The construction capex is estimated to have declined 1-2% decline in FY20 much lower than the 13-14% growth logged in FY19. Going forward, with the concerted efforts from the government to boost investments in infrastructure, the share of investment in projects such as roads, metro, smart cities, data centers, warehouses, water supply, railways & airports in construction is expected to rise in the coming years. Growth in building segment is likely to be moderate as the number of new project launches is still on the lower side. However, tax incentive for buyers in affordable housing segment & capital outlay of INR 25,000 Crore to complete stalled projects is a step in the right direction. The central government also unveiled the national infrastructure pipeline with an investment plan of INR 102 Lakh Crore from 2020-25. This policy of high govt spending in infra is likely to energise demand in other sectors and lead to more fund flows and asset creation. However, for FY21, delays in project award during Q4'20 and Q1'21 coupled with few challenges expected on people availability can impact demand in the current year..2


The Indian government has been prompt in realising the importance and value addition of manufacturing to India and has unlocked several investments to sustain its position in the global market, including the flagship 'Make in India' initiative. But, despite efforts from the government, the manufacturing sector contracted by 0.7% in FY20. Auto sector, an important sector for the Indian economy, witnessed a sharp decline of 18% YoY in sales for the year, with low rural income and strained credit availability affecting purchases. The slowdown is expected to sustain in most sectors till H1'21 while recovery will follow the improvements in the Covid-19 situation. The company expect demand from healthcare and pharmaceuticals sectors to rise significantly as a larger share of investments will be directed towards capacity addition. 


India's achievements in recent years in the energy sector have been termed as outstanding by the International energy agency (India 2020 – IEA). The domestic energy demand is expected to double over the next two decades. This has made India an attractive destination for foreign investors looking to grab a share of India's growth story. India is also aiming to ensure energy security by increasing domestic production and reducing its import dependence. The government targets raising share of renewables at 40%, accelerating investments in solar and wind outpacing investment in fossil fuel. Additional reform plans include biofuel development, investment and policy support to petrochemicals, updated technical standards for power plants and vehicles, and clean fuel. Government also announced in FY21 budget about allotting $3 Bn for power and renewable energy and development of 10,800 Km of national gas grid.

Government initiatives are promoting global investments, collaborations, and global companies to set up plants in India. This way the Indian manufacturing and services sectors will transcend into the realm of digital and connected era meeting international standards. The constant support from the government and the Foreign Direct Investment (FDI) has initiated the evolution of new partnerships that focuses on adoption of technologies associated with industrial internet of things (IIoT). Technology-driven processes will further offer customers visibility, transparency and security surging growth of the Indian manufacturing market to become a manufacturing hub and a knowledge center in the future.

A major driver for the company is that the Indian market is gaining traction toward offering services and technology that aim to digitally support and transform the existing and upcoming infrastructure and industrial projects. With high returns expected from automation technologies such as artificial intelligence (AI), IoT (connected devices), cloud services and industrial software solutions. Businesses and Government must invest in adopting these technologies to experience their vast benefits.


Financial Highlights

Overall revenue from operations was INR 3,290 Crore registering 3.6% growth. This growth was achieved despite competitive challenges on pricing. The domestic segment registered revenue of INR 1,847 Crore for the current year as compared to INR 1,714 Crore in the previous year. Revenue from exports was INR 1,443 Crore, registering a decline of 1.3% as over the previous year.

Overall profit after tax was INR 491 Crore. The company delivered a return of 14.9% on sales for the year (Previous year: 11.3%). Cost of Goods Sold (including excise duty) was 49.9% of Sales (Previous year: 51.9%).

Net Cash Flow from operations was INR 330 Crore, as compared to INR 312 Crore in the previous year, reflecting higher profitability and better working capital management. The company will continue to focus on working capital performance and positive operating cash flows.

Honeywell Autom Standalone December 2020 Net Sales at Rs 874.16 crore, down 3% Y-o-Y 3

February 05, 2021; Reported Standalone quarterly numbers for Honeywell Automation are:

  • Net Sales at Rs 874.16 crore in December 2020 down 3% from Rs. 901.20 crore in December 2019.
  • Quarterly Net Profit at Rs. 149.89 crore in December 2020 up 3.56% from Rs. 144.74 crore in December 2019.
  • EBITDA stands at Rs. 216.00 crore in December 2020 up 3.96% from Rs. 207.77 crore in December 2019.
  • Honeywell Autom EPS has increased to Rs. 169.53 in December 2020 from Rs. 163.70 in December 2019.

Recent developments

HAIL Names Ganesh Natarajan as Chairman 4

March 4, 2021 – Honeywell Automation India Limited (HAIL NSE: HONAUT) today announced Dr. Ganesh Natarajan’s appointment as Independent Director (Non-Executive) and Chairman of its Board of Directors, effective March 8, 2021.

As Chairman of Board of Directors, Dr. Natarajan will offer guidance to HAIL’s management team on the company’s overall strategy, business, and financial matters. He will provide direction and Board support for strong corporate governance.

Dr. Natarajan succeeds Mr. Suresh Senapaty, who completes his five-year tenure as Independent Director and Chairman of HAIL on March 7, 2021. Mr. Senapaty has conveyed his desire not to seek reappointment as Independent Director of the company for the second term due to his personal commitments. Accordingly, his tenure as Director of the company will come to an end on March 7, 2021.

Mr. Ashish Gaikwad, Managing Director, HAIL, said, “Dr. Ganesh Natarajan brings with him a rich and varied experience as a seasoned CEO, a tech entrepreneur, and an industry thought leader. The company look forward to his guidance and inputs to its strategic vision to become a software industrial company as the company steer the company through an ambitious and aggressive growth path. Honeywell Automation India is also grateful to Mr. Suresh Senapaty for his valuable contribution to HAIL over the last five years. His legacy of good governance and controls will continue to serve it well.”

Dr. Ganesh Natarajan has more than 30 years of industry experience, including 25 years as CEO for Aptech and Zensar Technologies. He is a serial entrepreneur, having founded 5F World, a platform for digital start-ups, skills, and social ventures, and he co-founded Global Talent Track, Skills Alpha, and Lighthouse Communities Foundation. He also co-founded two Indo-U.S. joint ventures, namely Kalzoom Advisors and the Center for AI and Advanced Analytics. He completed his master’s in Industrial Engineering from NITIE Mumbai, Ph.D. from IIT Bombay, and Advanced Management Program from Harvard Business School.


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Created by Asif Farooqui on 2021/05/17 17:38

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