The EV boom has caught the eye of many automotive components makers, few of which have shifted their business model to suit the trend
With the rising growth of the electric vehicle segment globally as well as locally, auto components manufacturer Sundram Fasteners Ltd. (SFL) is planning to increase exports to 50 per cent of the total turnover by focusing on EV components.
Chairman Suresh Krishna informed, “The newly commissioned unit in SEZ Sri City is totally committed to exports…We are also getting substantial orders from major customers outside of India for EV components.”
The TVS Group company posted a net profit of Rs 112.55 crore in three months to June despite facing challenges caused by the second wave of the coronavirus pandemic. It had a net loss of Rs 23.48 crore in the year-ago period.
During FY21, SFL exported products worth ₹1,010 crore that accounted for 34 per cent of the total turnover. In Q1 of FY22, exports grew by 39 per cent to ₹356 crore.
“We will reach 50 per cent of exports of total turnover from the existing 40 per cent, as it would provide a tremendous amount of cushion for the company, in case of a downward trend in the domestic market,” the chairman said. “During FY21, SFL incurred a capex of ₹140 crore for existing and new products. The capex was incurred in tandem with the production plans of key customers,” he added.
Krishna said that SFL was now a fully diversified engineering company, manufacturing fasteners and other hi-tech parts. The company also supplied special fasteners for the wind energy and infrastructure sector. SFL had expanded its engineering capabilities and moved up in the value chain in manufacturing, he said.
The EV boom has caught the eye of many automotive components makers, few of which have shifted their business model to suit the trend.
Recently, Pune-based automotive component manufacturer and forging firm Bharat Forge was reported to be eyeing to enter the burgeoning electric vehicle space with two-wheelers and three-wheelers by the fiscal of 2022. A top company official informed while adding that the launch is scheduled for the second half of the year.
The automotive components sector is expected to finally recover and witness a rebound in profits in the first two-quarters of FY22 after two years of suffering huge losses caused by the economic slowdown brought about by the pandemic, said a report by credit rating firm Crisil Ltd.
