Auto components maker Sona Comstar plans to invest up to Rs 1,000 crore by FY25 to scale up capacity, majorly for EV business, according to Group CFO Rohit Nanda.
The company, a major supplier of systems and components for the electrified and non-electrified powertrain segment to automobile manufacturers, expects revenue from the electric vehicle (EV) segment to account for up to 45 percent of its total revenue, up from 25 percent currently.
“Over a timeframe of FY23 plus two years — FY24 and FY25, I will say our expected capex spend will be anywhere between Rs 900 crore to Rs 1,000 crore. A large part of this (around 75 to 80 percent) is for the EV business,” Nanda told PTI.
Under the expansion plan, Sona Comstar would set up another plant at Manesar in Haryana for additional differential assembly capacity, he said adding the capacity of the existing facility has been fully utilised. The company had also moved to a new larger facility from a smaller unit in Pune.
“On the EV motor side, right now, we continue to expand within our existing facility in Chennai,” Nanda said, adding in future as the Indian electric EV segment grows, the company might have to look for additional location in Chennai also.
On the growth expectation from the EV business, he said,”As of September end — for the first six months — 25 per cent of the revenue has come from EV. I think by FY25, it should be between 40-45 percent.” In the first half of 2022-23, Sona Comstar had posted a revenue of Rs 1,247 crore, up 15 per cent from the year-ago period.
In the domestic market, the company supplies its different EV components to two-wheelers, three-wheelers and even for passenger vehicles, he said, adding for exports it is only four-wheeler for passenger vehicles and commercial vehicles.
Nanda said over the last two to three years, the company has focussed its investments on the R&D, new product development and embarked on electrification journey.
“Our long-term strategy has focused on the electrification of the automobile industry,” he said, adding the company has also “built a very solid order book, which was about Rs 20,500 crore by September-end, which gives us a lot of confidence in terms of our future growth”.
Out of the total order book, 68 per cent is from EV programmes. In the fiscal ended March 31, 2022, the company’s order book size was Rs 18,600 crore.
The company has also bagged a contract from an Indian automobile manufacturer to supply differential assemblies for its upcoming EV models in both passenger and commercial vehicles segment.
The production for the programme starts in FY24.”In the overall context, it is a very important project…in terms of size it is not that large. On a Rs 20,500 crore order size, this order size is about Rs 120 crore to Rs 130 crore,” Nanda said, without disclosing the name of the company.
However, directionally it is important “as right now, for the same customer we are supplying differential gears (and it is) a step forward from supplying components to subsystems”, he added.