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Sundram Fasteners Ltd., a broad-based engineering company, has lined up fresh investments worth ₹400 crore over the next two years as its sees bright prospects for the Indian automobile sector during FY23.
“After two years of sluggishness, India’s automobile sector posted double-digit growth,” said Suresh Krishna, chairman, while addressing the AGM.
“Q4 of FY22 for SFL was satisfactory. This year, Q1 is highly satisfactory.”
“The auto-components sector, commercial vehicles, passenger vehicles, two-wheelers segment and exports are doing well. All segments in the automotive sector are expected to post a double-digit growth during FY23. SFL is also going to see a bright future during FY23,” he said.
According to him, SFL proposes to make additional investments of ₹300 crore over the next two years in fasteners division for making fasteners for the wind segment. Besides, it also plans to invest over ₹100 crore in the next two years in the defence sector to manufacture and supply value-added sub-assemblies.
While mentioning that there was a revival in demand, he said that the powertrain components division in the Special Economic Zone had bagged contracts worth ₹150 crore for EV products.
SFL’s Sricity unit had commenced the supply of products for hybrid/EV applications. Further, it is expected to sign contracts worth over ₹200 crore for new EV products.
Earlier, SFL had announced an investment of ₹350 crore over a period of five years under the production linked incentive scheme for manufacturing Advanced Automotive Technology (AAT) components such as powertrain sub-assemblies for EVs and select Internal Combustion Engine vehicles.
Asked about capex, he said that SFL had incurred ₹146 crore to augment capacities in tandem with production plans of key customers. “We never cut back on capex,” he added.
Over the years, SFL had expanded its engineering capabilities and moved up in the value chain in manufacturing. It is now a broad-based engineering company capable of undertaking the manufacture of various components and assembly systems for automotive and other engineering applications in India and abroad, he said.
Considering the need for faster growth and to ensure consistent performance under economic cycles, SFL had been devising plans and broad-basing the product segments to increase its revenues, exports and profits, he added.
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