Sansera Engineering Ltd, which makes precision-forged and machined components for auto and non-auto segments, is planning to incur a capex of ₹300 crore in FY24, higher than FY23 capex of ₹244 crore, to support the growing order book.
“To support our growth in the non-ICE segments, we invested ₹244 crore as capex in 2022-23, for technological upgradation and adding production lines. We expect to spend a similar amount in the current financial year,” S Sekhar Vasan, Chairman & Managing Director, said in the company’s latest annual report.
“We also initiated the construction of a new facility for the machining of parts at our existing plant in Bidadi. This brownfield expansion project is expected to be completed by the end of this year and will enhance our presence in the tech-agnostic and xEV segment, including aluminium components,” he added.
This facility has been planned to house all the aluminium forged and machine product categories of components and the plan is in line with the company’s increased long-term sales contribution target of 20 per cent from xEV and tech-agnostic products.
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Vikas Goel, Chief Financial Officer of the company, told investors during the Q1 FY24 earnings call that the capex for FY24 is estimated to be in the vicinity of ₹300 crore. “A majority of this capex will be in the areas of non-auto and Auto-ICE categories in order to deliver upon our growing order book,” he added.
The capex will be spent on capacity expansion and line balancing. It will also spend some portion on the machining facility which is under construction.
The ₹2,347 crore Bengaluru-headquartered company secured about ₹370 crore worth of new orders during the first quarter of this fiscal. As of June 2023, the order book with annual peak revenues stood at ₹1,690 crore. Almost 70 per cent of new order inflows came in from the auto-ICE segment, while 21 per cent was from the autotech agnostic and xEV segment and the remaining 9 per cent was from the non-auto segment.
Tech-agnostic and xEV have been key focus areas for Sansera for the past few years. It has already been working with well-known domestic as well as global customers
Between FY13 and FY23, the company’s revenue and profit after tax have grown at a CAGR of 16 per cent and 20 per cent, respectively.
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The latest annual report highlighted that it has devised a 4-pronged growth programme – diversification into tech-agnostic products and catering to the xEV opportunity; consolidation and strengthening of global market share in the existing portfolio and diversification into technology-agnostic products; focus on leveraging existing capabilities to diversify further into non-automotive businesses and expand the addressable market; and to retain and strengthen technological leadership through continued focus on engineering capabilities.
The company has 16 factories, located near the OEM production facilities, across India and one in Sweden.