Talbros Automotive Components Ltd proposes a capex of ₹205 crore over the next 3-4 years in expanding capacities across its businesses as the diversified auto parts group seeks to double its revenue by FY27.
In FY23, the company secured multi-year orders exceeding ₹1,000 crore from both domestic and international customers across its product segments, joint ventures, and business divisions. These orders will be executed over the next five years and cover the company’s product lines, including gaskets, heat shields, forgings, and chassis.
“The new orders will enable Talbros to expand market share by serving both existing and new customers across different geographies,” Anuj Talwar, Joint Managing Director, Talbros Automotive Components Ltd, told businessline.
The company plans to invest ₹50 crore in the gasket and heat shield business as the capacity utilisation has reached 85 per cent.
As part of the expansion, it will set up a separate line for new generation heat shields to supply to Maruti, Hyundai, and Kia. The company expects this business to grow at a CAGR of 14 per cent over the next four years and the revenue of this business is expected to grow to ₹700 crore by FY27 from an estimated ₹423 crore in FY23.
Focus on EVs
Talbros will be investing ₹60 crore in the forging business. It will be setting up a new machining shop and will be adding heavy-weight parts to its product portfolio. This business has a strong overseas presence and supplies to top companies. Also, the business will focus more on EVs going forward. The forging business is expected to grow at a CAGR of 23 per cent in the next four years — revenue to grow from about ₹215 crore in FY23 to ₹500 crore in FY27.
Talbros’ 50:50 JV with Marelli Suspension Systems SpA, Marelli Talbros Chassis Systems (MTCS), has planned a capex of ₹80 crore. It is setting up a new factory in Gujarat to tap emerging businesses in the country as also in export markets. This business will also give a stronger thrust on EVs in the coming years. MTCS, a prominent player in control arms and links business, expects to grow at a CAGR of 35 per cent in the next four years – its revenue is to grow to ₹700 crore in FY27 from an estimated ₹210 crore in FY23.
The company will be investing the remaining capex in Talbros Marugo Rubber, a 50:50 JV with Marugo Rubber, and Nippon Leakless Talbors, and a 40 per cent JV with Japan’s Nippon Leakless Corporation.
The capex will be funded by respective companies through internal accruals and some borrowings.
The proposed expansion programme, devised under its Talbros 2.0 growth plan, is expected to help the company to double its group revenue to about ₹2,200 crore by FY27 from an estimated ₹1,016 crore in FY23. As there will be a bigger focus on EV business, the share of EV business in total group revenue is expected to grow to 12 per cent in FY27 from about two per cent in FY23. Also, the share of total exports is to grow to 35 per cent from 25 per cent.
“By FY27, Talbros also expects to achieve margins of 15-16 per cent and have set its sights on crossing the 20 per cent RoCE in the coming years,” said Talwar.