The country’s largest diversified forging firm, Bharat Forge, wants its defence vertical to become its new core, as it aggressively pursues ambitions in this space. Baba Kalyani, chairman and managing director, unveiled Bharat Forge’s plans on his 75th birthday while speaking to Swaraj Baggonkar. Excerpts.
Q. Bharat Forge is in a major transformation phase where it is moving from components to products, defence being one of them. What is this transformation all about?
A. It is fundamentally aimed at a diversifying our base and moving into products. Defence is one such area. Electronics, embedded systems, software, AI to some extent, digital technologies; they’re all going to come.
Q. Will this diversification create new segments for you?
A. Yes, we can get into undercarriage of construction equipment, we can get into transmission, we can get into axles, we can get into, 10 different types of products. So that’s the direction we are taking. That’s where a lot of our R&D work currently is going.
Q. How well is the defence space growing for you?
A. The defence division has now taken off in a big way. And we see that growing at a very rapid pace, and not just domestically. Everything we do in our company is based on developing technology through our own innovation and our own know-how.
Q. You mentioned about getting into products, that you have 10 different avenues to look at. Any specific segment you have got into so far?
A. We now make artillery guns. We make three or four different types or armoured vehicles. We are better than any vehicle manufacturer in India today in armoured vehicles. We are also exporting them alongside artillery guns. We make ammunition which we are exporting. We are doing a lot of work in the naval systems; things like torpedoes, unmanned vehicles, drones, undersea unmanned systems.
Q. What more work are you doing in defence?
A. We are developing tracked vehicles and wheeled vehicles for infantry. That will lead us to making at some point in time, main battle tanks. Because the technologies are very similar, the size is different. These things require massive investments.
Q. Around 80% of your defence revenues come from outside of India. Will it stay that way?
A. Very soon, in the next couple of months, we should be getting large domestic orders in defence. But we will focus on global markets, not just the Indian market.
Q. In the next four or five years, how big would defence contribution be to Bharat Forge’s revenue?
A. In 2024-25, we should be over Rs 2,000 crore. We were zero last year and these will be exports. The domestic orders will just start and they will be as large, almost or larger. As you develop technology, new ideas come, new products come. We are now developing guns that will have a 100 kilometer range. Currently we have a 48 kilometers range. And we are developing ammunition that will fire 100 km.
Q. Will the defence business of the company be on par with the core business?
A. It is quite likely that over a period of 7-8 years, depending on how India’s economy grows, our defence budgets will double from today’s levels because they are based on a 3.5 trillion economy.
Q. You have also ventured into electric vehicles (EV)
A. EV business is at the component level. We are making component subsystems for EVs. We have also invested in some EV companies, not large investments. That is because we want to learn about this business. We want to learn about the technology. So we have a whole range of investments right from 48 volts right up to 800 volts technology.