Brakes India, one of the largest braking system suppliers and part of the TVS-Santhanam Group, expects two-fold growth in domestic business and a three-fold increase in export business over the next five years, supported by capacity expansion, surge in new orders and launch of a new range of products.
“On a five-year horizon, we expect the domestic business to grow by 2x and exports will grow by 3x. In the domestic market, volume growth will be a big driver of our business in addition to new products and content that we will get on vehicles. We will introduce more advanced products which will result in a high-value generation,” Sriram Viji, Managing Director of Brakes India, told BusinessLine.
He is also optimistic about export opportunities and for Brakes India, which has three major businesses — brakes, foundry and polymer — exports would be one of the key levers for growth, going forward.
Upbeat on exports
“There is some level of derisking global customers are looking at. We are seeing new RFQs (requests for quotes) based on that. But India does have other challenges. Compared with China, our cost competitiveness is still an issue. They have commodity prices that many Indian companies are not able to meet, while shipping and logistics from India are not the most efficient. There is still a little bit of competitive edge that India needs to get, he felt.
However, Viji is of the view that India would improve its competitiveness. The government has made a lot of efforts to get India there. PLI scheme will be a good move, while infra development started to improve quite rapidly, he added.
Presently, the company’s exports are in the range of ₹800-900 crore out of the turnover of ₹5,000 crore. However, the total turnover including its associate companies would be about ₹5,500 crore, of which total exports would be around ₹1,400 crore.
“Europe is a big focus for us as we already do about ₹1,000 crore of exports of the total ₹1,400 crore. We will further strengthen our exports to Europe. We are a big supplier of safety-critical braking castings. One in four cars in Europe will probably have Brakes India’s castings. We will look at growing even further. Also, we expect new opportunities in South-East Asia due to emerging trade agreements, he added.
New facility in Chennai
In terms of capacity, it may run out of capacity in the next couple of years given a favourable order outlook. The company is already exploring further investments in ramping up the capacity of existing products. It will also invest in new product manufacturing. It is in the process of building a new factory at Thervoy Kandigai near Chennai at an investment of ₹100 crore.
“This is for CV braking systems where we will have to make products for which we have been working with all CV makers for the past two years. These products are in the process of getting validated. It is also exploring the capacity increase in other factories. It has one of the largest foundry capacity of 180,000 tonnes.
With the electric revolution kicking in, the company is making investments in certain product segments, which will be impacted by the EV push, for changeover to electric. “We have already started supplying several parts to EV customers. We already have a pretty large order from an EV company in Europe,” he added.