Leading auto component house Rane Group has bagged ₹620-crore worth of new business orders during H1 of this fiscal and targets to achieve higher than industry growth.
During H1, ZF Rane Automotive India bagged ₹240-crore worth of orders for occupant safety products and ₹155-crore new orders for steering gear products. Rane (Madras) bagged ₹105-crore orders for steering products from various international and domestic companies. Rane NSK won ₹75-crore orders for manual steering columns from various companies. Rane Brake Lining and Rane Engine Valves secured orders worth ₹.35 crore and ₹10 crore respectively.
During the period under review, the group recorded a 33 per cent increase in total revenue at ₹3,306 crore compared to ₹2,485 crore in the year-ago period.
Revenue growth
“The group companies posted strong revenue growth supported by favourable demand from Indian OE and export customers. Higher volumes and improved operational performance helped to mitigate material price increases,” said L Ganesh, Chairman and Managing Director, Rane Holdings Ltd, the holding company of the Rane Group.
Revenue from Indian OE customers (accounted for 68 per cent of total revenue) grew 36 per cent supported by strong growth across vehicle segments. Also, revenues from International customers (23 per cent of total revenue) increased by 25 per cent driven by higher off-take across products. Revenue from the Indian aftermarket segment (which makes up 9 per cent of total revenue) grew 31 per cent.
“More than 93 per cent of revenue came from powertrain agnostic products and the company continued to dominate the domestic market across products,” according to the group’s investor document.
Meanwhile, the group continues to target higher-than-industry growth in its business segments. During H1, the group’s passenger vehicle revenue recorded 34 per cent growth compared to industry growth of 36 per cent. “Lower growth was due to lower increase of few served models,” it said.
However, the group recorded significantly higher growth in the commercial vehicle, tractor, and two-wheeler businesses. In CV, the group’s growth was 71 per cent as against industry growth of 56 per cent, while tractor revenue grew 15 per cent as against 5 per cent industry growth, supported by an increase in power steering penetration. In two-wheeler, the group recorded a 34 per cent increase, while the industry growth was at 20 per cent. “Better performance is driven by higher offtake of valve train products,” it said.
Growing demand
The management pointed out that the easing of semiconductor shortage is driving demand from Indian PV customers. The the group is witnessing a demand up-cycle in the CV segment. Also, it is seeing plateauing of commodity prices and expects some softening in the coming quarters.