Automotive component manufacturer Sundram Fasteners (SFL), a TVS Group company, has decided to focus on non-auto segment such as aerospace and defence sectors, as part of a strategy to de-risk its business model and to shelter itself against the cyclical nature of the auto industry. In order to further SFL’s growth in non-auto segment, the company incorporated a wholly-owned subsidiary named TVS Engineering. The new arm would manufacture wide spectrum of forged, machined parts, missile parts, precision machined parts, titanium and stainless steel fasteners, torsion bars, transmission parts and engine parts like con rods, crank shafts engine liners pumps and critical fasteners, said a company statement. SFL has earmarked Rs 100 crore for the defence division operations.
The company proposes to spend about Rs 150 crore towards capital expenditure for the financial year 2021 as part of capacity expansion of its existing lines of businesses. It had already incurred Rs 63 crore towards capital expenditure during the half-year ended September 30. SFL had set up a SEZ unit at Sri City, Andhra Pradesh , with an initial investment of Rs 100 crore. The new unit has received an order from a leading European manufacturer to manufacture and export high precision engineering components. The SEZ unit is developing parts for hybrid electric vehicles, a move expected to give further push to the export business of the company, the statement said.
TVS Upasana, a wholly-owned subsidiary of the company, has commenced a new division at its plant at Vallam Vadagal in Sriperumbudur at an investment of Rs 17 crore, proposed to be spent over a period of three years. The new division has been set up to manufacture radiator cap cover, radiator cap housing, radiator cap lid and filter element parts. The products manufactured by the company will be supplied to domestic as well as MNC customers.
SFL has posted a net profit of Rs 97.36 crore for the quarter ended September 30, 2020 as against Rs 71.07 crore in the same period in the corresponding previous year, registering an increase of 37%. The revenue from operations was at Rs 766.85 crore as against Rs 766.82 crore. The domestic sales were at Rs 483.88 crore as against Rs 450.01 crore while export sales were at Rs 260.28 crore as against Rs 290.88 crore. The EBITDA for the quarter was at Rs 167.52 crore as against Rs 145.35 crore, an increase of 15.3%. The company posted a higher EBITDA percentage on revenue from operations at 21.8% as against 18.9% due to stable material prices and stringent cost control measures, it added.
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