Sundram Fasteners Ltd. (SFL) is focussing on exports to enable the company to tide over the slowdown in the domestic automobile sector.
“Currently, our exports stand at 35% and retail at 10%,” said Suresh Krishna, non-executive chairman, Sundram Fasteners Ltd. “In the coming years, we aim to increase it [exports] to 50%.”
Mr. Krishna also said that SFL had committed to invest ₹800 crore during 2018-19 and 2019-20, of which ₹350 crore would be deployed during the current fiscal.
A significant portion from this would go towards exports.
“We were able to mitigate the adverse impact of the slowdown due to a combination of various measures such as focus on exports, after-market, product innovation, cost reduction themes and adherence to TQM [total quality management] principles,” he said.
“We have managed the downward trend. A good company has to manage both upward and downward trends,” he added.
Q1 net declines
During the first quarter of 2019-20, SFL’s standalone net profit declined to ₹93.11 crore from ₹106.65 crore in the year ago period. Revenue from operations was lower at ₹945.35 crore against ₹968.51 crore. The company reported domestic sales of ₹557.22 crore (₹614.29 crore). Exports were ₹348.28 crore (₹321.71 crore).
In the first quarter of 2019-20, SFL’s domestic sales dropped by 9.3%, compared with the corresponding period last year, while exports revenue increased by 8.3%.
“The drop in overall revenue was 2.5%. If not for growth in exports, the dip would have been higher,” said S. Meenakshisundaram, chief financial officer, SFL.
Mr. Krishna said SFL was in the process of setting up a Special Economic Zone unit at Sri City to manufacture and export high precision engineering components. In order to expand growth in non-auto segments, SFL has incorporated a wholly owned subsidiary named Sunfast TVS Ltd.
The new firm would focus on growth opportunities in aerospace and defence segments and continue to expand SFL’s existing business in the aerospace segment.
On introduction of electric vehicles, he said more charging stations were required for EVs to gain momentum. “One has to deal with the disposal of batteries, which none has talked about,” he said.
Mr. Krishna also disclosed that K. Ramesh, who was associated with SFL as a director since December 1971, resigned in June 2019 due to personal reasons.
