This increase is anticipated to come from the EV business segment, which is integral to the company’s strategy to diversify its operations.
With a certain growth in Sterling Gtake E-Mobility Ltd and increasing adoption of electric vehicles (EVs) in India, Sterling Tools Ltd anticipates that its revenue from EV components will rise to approximately 40% by the next fiscal year. This growth is expected to stem from the EV business segment, which plays a crucial role in the company’s diversification strategy.
Sterling Tools, the second-largest manufacturer of fasteners for original equipment manufacturers in India, has broadened its focus through its subsidiary, Sterling Gtake E-Mobility, established in 2020. This shift from solely producing fasteners is significant, as Sterling Gtake contributed 22% to Sterling Tools’ total revenue of Rs 775 crore in the previous fiscal year.
Jaideep Wadhwa, Managing Director of Sterling Gtake E-Mobility and a director at Sterling Tools, recently stated that the share of electric vehicle (EV) related sales in the company’s total revenue is gradually rising. He mentioned that this year it might reach about 33%, with a target of 40% for the fiscal year 2024-25. Sterling Tools is capitalizing on the increasing EV market to expand its operations, leveraging investments in its engineering team, product innovation, capacity, and supply chain to enhance growth. The domestic EV industry is expected to grow annually by 40% to 50%, with the company planning to amplify its operations in line with the primary market’s expansion, according to Wadhwa.
Currently, Sterling Gtake primarily manufactures motor control units for two-wheelers, which constitutes over 80% of its business. The remainder largely comes from the three-wheeler segment. Moving forward, the company aims to increase its production volumes through the light commercial vehicle category.
Jaideep Wadhwa stated that the company is currently focusing primarily on two- and three-wheelers but anticipates significant progress in the light commercial vehicle segment next year. Originally, Sterling Gtake began with commercial vehicle offerings but quickly shifted focus to the two- and three-wheeler segments, where EV adoption has been faster. Wadhwa now expects a rapid increase in EV adoption within the light commercial vehicle sector, more so than in other commercial vehicle categories.
Wadhwa also highlighted that while the company is active on various fronts, the main volume drivers are expected to be two-wheelers, three-wheelers, and light commercial vehicles. He mentioned that plans are underway to announce new products in the electric powertrain area by the end of April, underlining the company’s goal to be a supplier of EV powertrain components. With a well-established engineering and sales team, he sees a logical path for expanding their product offerings.
Sterling Gtake operates one manufacturing facility in Faridabad, which produced 300,000 motor control units last fiscal year. Plans are underway to double this output by the end of FY25. The company has allocated Rs 28 crore for capital expenditures this fiscal year and intends to invest a similar amount next year.
Recently, Sterling Gtake received its initial export order, which is a contract manufacturing agreement anticipated to generate short-term revenue between Rs 1.5 and 2 crore. Wadhwa disclosed that while the specifics of the customer could not be shared, it was confirmed that the customer is part of the electric vehicle (EV) sector. Furthermore, the order is not for motor control units but for a different related product.
