Sundram Fasteners (SFL) intends to fund a number of projects with an estimated 350–400 crore. With an order book of Rs 4,000 crore in the EV segment, the company looks to grow its non-auto contribution.
SFL’s management talked about the company’s performance and its variety of business sectors at a recent investor call. In the quarter ending March 20,24, the company had its highest quarterly profit of Rs 132 crore, with domestic sales at Rs 846 crore.
The export performance increased significantly to Rs 385 crore, exceeding both the equivalent quarter of the prior year and the third quarter of the current year. At Rs 1,294 crore, total revenues, exclusive of other income, reached a quarterly high. The company’s EBITDA for the quarter was 17%, indicating good material margins.
From its present 30% non-auto segment contribution, SFL hopes to grow it to 50%. The management expressed confidence in accomplishing this objective by strategically concentrating on off-highway applications, industrial fasteners, and wind energy.
The company’s export revenue for 2023-24 was around USD 170 million, with expectations of reaching USD 200 million in the coming year. Management is cautiously optimistic about Q1, citing promising industry-wide numbers from SIAM for April.
SFL’s UK subsidiary is poised for another strong year despite the European truck market slowdown. The Chinese subsidiary also shows promise, with practical business plans accounting for the country’s economic slowdown. Both the UK and Chinese entities are expected to maintain their positive momentum.
SFL is investing significantly in new parts for the growing Plug-In Hybrid, EV, and ICE vehicle sectors. The company’s order book for electric vehicle sub-assemblies has increased from USD 250 million to USD 425 million.SFL manufactures and supplies hot-forged and machined parts like bevel gears and pinions. The company also supplies battery coolant caps, fasteners, and multivariate shafts for the powertrain application. “SFL is also working on an electric water pump. So, all our technologies have application toward EV requirements,” said R Dilip Kumar, the CFO of Sundram Fasteners.
The company plans to double its wind energy revenue to around Rs 500 crore in the next 2-3 years. SFL expects higher export revenues in the second half of the year, potentially shifting the domestic-export ratio from 70-30 to two-thirds domestic and one-third export.
CFO R Dilip Kumar outlined plans to spend Rs 350-400 crore on capex, focusing on the fasteners’ division for export markets and powertrain components in a special economic zone for various hybrid and electric vehicle applications. These investment in non-auto and auto exports are expected to yield higher EBITDA, with the company aspiring to return to a 19-20% EBITDA margin, from the current 17%.