Leading auto-parts-maker Sundram Fasteners expects the electric vehicle (EV) business to account for about 15 per cent of its portfolio over the next 3-4 years, up from 2 per cent now, with a strong pick up in its EV parts orders with global OEMs (original equipment manufacturers) implementing the China+1 strategy on the back of growing momentum for EVs in Europe and North America.
“Our EV business is starting to look good with a surge in orders from global passenger vehicle OEMs. The China+1 factor is also playing in this,” Arathi Krishna, Managing Director, Sundram Fasteners, told BusinessLine .
The company has signed a few new contracts with passenger vehicle makers in Europe and North America, and is in discussion with a few more to supply parts for their upcoming new launches.
Supplying to top 5
“Of the top 10 global PV OEMs, we are supplying to 5, while we have bagged very good orders from two big players. So, we are presently focussing on the PV side of the EV business in the global market. Overall, our EV business is very promising now,” she added. Meanwhile, the company has also started to target the domestic electric two-wheeler market in view of growing adoption of these vehicles. “We are already in RFQ stage with most electric two-wheeler manufacturers,” said Krishna,
She said the company’s existing manufacturing technologies present huge opportunities to serve the EV requirements.
Barring certain areas like battery and associated parts, the company is able to supply most other parts for EVs.
In the traditional vehicles, Sundram Fasteners is seeing a good revival in demand, which has pushed its capacity utilisation from 65 per cent in Q1 to 70-75 per cent in Q2 depending on the segment.
Capex plan on track
“We are going ahead with our capex plan. We were a little slow in Q1 due to the uncertainty over Covid situation. Hopefully, the worst is behind us and if India continues to vaccinate the way it is doing, there will be a positive momentum. We are looking at about ₹250 crore capex for this fiscal. But if there is a demand surge, we may even increase the spend,” she said.
Topline jumps
Sundram Fasteners has reported a double-digit growth in topline and bottomline during the September quarter amid challenging market conditions due to shortage of chips and commodity price increases.
Its standalone profit-after-tax grew 23 per cent at ₹120 crore compared to ₹97 crore in the year-ago quarter. Revenue from operations grew 39 per cent at ₹1,063 crore (₹767 crore)
EBITDA for the September 2021 quarter was ₹201 crore (₹168 crore), helped by cost-control measures amid a spike in raw material prices.