Bharat Forge Ltd, a leading engineering and auto parts maker, expects its new business segments such as e-mobility and defence to gain traction from this fiscal.
While the Pune-headquartered company expanded its core business over the years, it has also diversified into several new segments, of which some are adjacent categories and some are areas where the company saw good synergy with its core strengths. It expanded to markets such as e-mobility, lightweighting, defence and aerospace.
The defence and e-mobility businesses are starting to witness meaningful traction with successful firing trials of the ATAGS (Advanced Towed Artillery Gun System) and the receipt of maiden order for the supply of power electronics to a leading Indian CV manufacturer, BN Kalyani, Chairman & Managing Director of the company, said in the company’s latest annual report.
He said the company is making steady progress in defence space. The company has received repeat orders for armoured personnel vehicles and recently supplied vehicles to the Indian Army. Besides, many other products and platforms are now playing out and impressing the armed forces, including the artillery platform where the company has successfully completed final army trials. “We expect things will start falling into place in the coming 12-24 months,” he added.
The $1.4 billion Bharat Forge has also made tremendous progress in its e-mobility segment. “What pleases me the most over the past year has been the organic work we have done in our R&D centre and the build-up of the organisation structure. The coming years will see these bear fruit, starting as early as FY23 itself. I am confident that FY23 should mark the maiden year of revenue contribution from our e-mobility vertical,” he added.
In this fiscal, it plans to launch a suite of products and sub-systems for EV application. Its subsidiary Tork Motors has also launched its e-motorbike Kratos with a 2,000-strong order book. “Before effecting deliveries, Tork is taking added precautions in terms of safety testing,” he pointed out.
Meanwhile, the company has seen revitalised international operations now. A combination of product and cost rationalisation, focus on productivity and investment towards a more favourable product mix will hopefully result in sustainable 10 per cent plus margins going forward. Historically, this stood at an average of 5 per cent.
The company has also commercialised a new greenfield facility in North Carolina, US. This US unit along with the facility in Germany will cater to the aluminium forgings requirements for global marquee OEMs. “These facilities will play a key role in enhancing the Group’s presence in the EV transition globally. Interestingly, we are witnessing higher inquiries than originally,” he said.
Overall, the company has reorganised its internal structure over the last few months. It has five vertical business units focusing on end customer markets – Automotive, Industrial, E-mobility, Defence, Aerospace & Turbomachinery. “These business units are fully equipped with the infrastructure and organisation to serve their respective markets,” said Kalyani.