Sundram Fasteners targets 50% export revenue
Sundram Fasteners (SFL), an automotive component company in the TVS Group stable, aims to earn 50% of its revenue from exports. The company also pushed its non-automotive business
R Dilip Kumar, SFL’s chief financial officer, told analysts that currently one-third of SFL’s revenue comes from exports and two-thirds from the domestic market. Within this segment, approximately 25% to 30% would be passenger vehicles, while the remaining 60% to 70% would come from commercial vehicles, agricultural applications, stationary engines, oil and gas.
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The company could post slightly lower-than-expected export performance for this fiscal year, in dollar terms. Its plan was to do about $200 million in exports for FY23, but would end the year between $185 million and $190 million. SFL last year made about $180 million and expected to grow 10% to about $200 million.
SFL has an export mix with 70% contributed by North America and 20% by Europe and approximately 10% by Asia and other regions.
“It will give us a good platform to generate our export revenue and be completely insulated from domestic cyclicality,” the company said.
As for capital expenditure, SFL said it would likely commit around 300 crore this year.
The company will be vigilant and although it laid out its plan at the beginning of the year, it was around 400 crores. But given current inputs and business conditions, SFL is expected to commit around 300 crore this year and capital expenditure would be committed at this level of around 300 crore in the next two years as well.
The company said it was monitoring the situation very closely and aligning the capital investment program with its customers’ schedules.
On the electric vehicle components front, SFL said it currently contributes around 3% of the total business. He hopes to grow with existing customers like General Motors, probably JLR and other customers and would approach double digits.
Apart from the radiator cap, the company has already developed parts and provides dual gears and cogs that go into the disc housing and finally into the EV application. Also, SFL is also in the input and output tree which goes into EV.
SFL will spend around 80 crore on wind power this year and hopes to grow the segment from the current level of 150 crore to around 300 crore to 350 crore in the next 18 months. The company is studying other resource opportunities with a European client which is currently being negotiated.