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Auto component major Anand Group is actively looking to enter the defence sector as a parts supplier.
The Group is in talks with a few companies for a likely joint venture and may even set up a dedicated entity for the business.
The “investment and gestation” periods are higher in the sector, Mr Sandeep Balooja, President, Global Business Development, Anand Automotive told Business Line . “The (defence) industry has a lot of potential. The standards are much higher for the precision components, but the margins are also good. We're discussing at this point, as this will have to be a different mindset for us,” Mr Balooja said.
The company is particularly interested in the defence aviation business as it feels it already has certain synergies in the area. It is eyeing the Government-mandated offsets clause for local manufacturing and technology sharing from the upcoming defence deals, such as the one on fighter planes.
Aerospace
“Aerospace could be preferred because of partnerships, but we are interested in all areas. We could start initially with opening an engineering centre for defence. The issue is the limitation of FDI in the sector, which limits foreign participation,” he said.
The Anand Group incidentally also operates two resorts as another separate business interest. However, its core interest is in auto components — it operates 19 companies, and 14 joint ventures with major global brands — and manufactures shock absorbers, exhausts and brake systems among others.
The group expects turnover to increase by 21 per cent this fiscal, to Rs 5,100 crore. In 2012-13, it expects a growth of 16-17 per cent. And, by 2015, the sales target is Rs 10,000 crore.
“We're looking to get into electronic components. That is the future for the business. We're not adding any fresh capacity this year; all our expansion plans are already complete,” Mr Balooja said.
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