Sundram Fasteners’ electric vehicle (EV) business has been in discussion with companies for a potential order value of ₹1,000 crore.
This is an addition to existing EV orders of more than ₹3,000 crore.
The company has been supplying EV components such as fasteners, hot forged machine parts, radiator caps, and multiple varieties of shafts, among others, to existing customers entering the EV segment as also the new players.
Its EV order book now is at $408 million to be executed over six years. “From the second half of the next financial year, the supplies would commence. We would see incremental revenues of about Rs.500 crore coming in from 2026 onwards and going up to 2031,” R Dilip Kumar, Chief Financial Officer, Sundram Fasteners, said during the Q1FY24 earnings call of the company.
In addition to the above, the company is also discussing with some of its customers to supply parts for their EV platforms. The potential size of this business, which is under discussion, is estimated at ₹1,000 crore over five years.
Sundram Fasteners has been supplying EV parts for companies in India and North America. Recently, it started supplying EV components to companies in Europe as well.
To execute orders in the EV business, the company is spending Rs.300 crore (as part of the proposed Rs.1000 crore capex programme) over the next 12 months in capacity expansion at its units in Mahindra City and Sri City.
With the growing EV orders, the company expects the share of EV business in total revenue to grow from 3% now to 10 per cent in the next 3 years.
The company is actively participating in the differential gears segment in EVs and exploring opportunities in hybrid and off-highway vehicles too. The management said it is open to cater to alternative fuel segments within the evolving electric mobility landscape.
The expected drop in content per vehicle during the transition from ICE to EV is estimated at 20% of the previous content level.
To offset the potential impact of the transition, Sundram Fasteners is exploring opportunities in non-automotive segments such as renewable energy and infrastructure.
The company expects a recovery in exports from the second half of this fiscal. Export markets are expected to contribute 35-40% to its revenue in the medium term from 30% now.