Bharat Forge has had a good second quarter with an 81% jump in profit and a 34.7% rise in turnover. Its proposal for defence production has also been cleared by the government. The company got its first purchase order from Safran, a global aerospace, defence and security company, for supply of critical forgings and machined components. Amit Kalyani, executive director, Bharat Forge, told Geeta Nair that the five new industrial verticals, including defence, will each have revenues of $100 million by 2020. Kalyani Group’s defence initiatives are being carried out under a subsidiary, Kalyani Strategic Systems. And the company is on track to double sales by FY18. Excerpts

You have identified defence, aerospace, oil & gas exploration, mining, power, rail, marine and construction as areas of growth. How are these verticals growing?
In the non-automotive sector, where there are five verticals, we are making good progress. Our overall goal by 2018 is to increase Made-in-India revenues from Rs 2,500 crore to Rs 7,000 crore (just for standalone Bharat Forge) with minimal capex.
Our current non-automotive business revenue is Rs 1,400-1,500 crore and our target is to have five $100-million verticals by 2020, so that we are easily double of what we are today.
Whatever capex is needed will be largely for new areas and machining. For existing areas, we will go with existing capacities. And our emphasis on growth is to translate knowledge and an asset-light approach into revenues than convert capacities into revenue growth. It’s not investment-led — it is an innovation-led approach.

How ready are you to grab the defence opportunity? What is the latest on your JV, BF Elbit Advanced Systems?
The 74:26 JV with Elbit is in force. It is housed under Kalyani Strategic Systems. All design and development of products is happening under that. For manufacturing, we have multiple options. Right now, we are doing it closeby, in a rented facility, but we are building our own facility.

Will you look at buying companies in the defence space, just as you did in the auto segment?
I don’t think we will buy big defence companies. But you never know. Things will happen only if they make sense.

Any more defence JVs? Any technology area you are looking at?
We are working on many different areas, but I won’t say anything forward-looking. We are looking at filling technology gaps, if and where they exist. We are looking to partner people who complement us and they are all not JVs.