Sundram Fasteners diversifies into aerospace, defence

Arathi Krishna, MD, Sundram Fasteners   | Photo Credit: Special Arrangement

Sundram Fasteners Ltd. has forayed into the aerospace and defence sectors to pare SFL’s dependence on its auto business given the cyclical nature of the industry, said Managing Director Arathi Krishna.

“We have commenced operations in defence and aerospace to de-risk our business model and shelter it against the cyclical nature of the auto industry” Ms. Krishna said in an interview on Wednesday.

“Currently, the auto to non-auto business stands at 80:20 ratio. Going forward, we would like that to be in the ratio of 75:25.”

The firm’s defence business was raking in about ₹2 crore per month, while operations at the aerospace unit had just started in a small way, she added.

The TVS Group firm had incorporated Sunfast TVS Ltd. in April 2019 and TVS Engineering Ltd. in February as wholly owned units to make components and parts for aerospace and defence. A budget of ₹100 crore was earmarked for this purpose.

TVS Upasana, another wholly owned arm, had commenced a new division to make radiator cap covers, radiator cap housings, radiator cap lids and filter element parts for local and MNC customers. It plans to invest ₹17 crore over three years.

Capital expenditure

For the current fiscal, SFL had earmarked about ₹150 crore for capacity expansion of existing lines of business. It had already incurred ₹63 crore till September and the balance would be spent on expanding facilities in Andhra Pradesh, Tamil Nadu and Puducherry.

Earlier, SFL reported a 37% jump in second-quarter standalone net profit at ₹97.4 crore. Revenue from operations was almost flat at ₹767 crore. The board declared an interim dividend of ₹1.30 per share.

Domestic sales rose to ₹484 crore( ₹450 crore), showing clear signs of improvement in demand. However, export sales dipped to ₹260 crore (₹291 crore).

Following improved financial performance, SFL, which had cut salaries, restored them except for presidents and top management, she said.

Stating that sales volumes had been picking up since the second quarter, compared with the year-earlier period, Ms. Krishna said she expected the coming quarters to augur well for SFL.

On the impact of recent lockdowns in Europe, she said that SFL’s exposure was minimal and hence would not affect export revenue.

Asked about SFL’s China’s step-down subsidiary, she said, operations were back to normal since June 2020 and the venture clockeddid the highest sales in October. “It is a profitable venture and we will continue to operate it.”

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Printable version | Mar 8, 2021 10:35:19 PM |

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