Aiming At A Diverse Product Portfolio

How do you see the demand from the automobile industry in the recent couple of years?

The last two years were not very good; infact there was a down trend since 2012 onwards. This year we are seeing some pickup in commercial vehicles, two-wheelers as well as passenger vehicles. The pick-up is more in two-wheelers but we will see the improvement in commercial vehicles over a few quarters.

In last couple of years, the automobile companies have started expanding their own capacities, so is there any intimation from their side? And what are your plans?

Yes, some of our customers have quite confidently told us that we should go ahead and invest in our capacities as well to meet their overall demand. We are in discussion on finalising these capacity additions. It is also in our pipeline for the increased investments wherever capacity increase is required, especially on machining side.

Most of the companies are expanding out of Maharashtra. We too have started discussing such opportunities with our customers. We are open to that; we are more of a local for local strategy over the coming years not only in India but even international. We will be getting more involved in Europe.

Your product line is pre-dominantly 70-80 per cent from automobile. Do you have any plans to include other product or other industry, if you can elaborate?

We will expand in the construction industry, placing more orders as well as inquiries. We are currently developing parts for construction applications as well as industrial applications like industrial machinery. Th ere is also agro and power where there are a couple of different markets.

What is your prediction about the rupee scenario over a year?

I think it will not depreciate given that our FDI inflows coming into India are improving. So we have more dollars coming in, which would mean that rupee should appreciate. As we get more and more investor friendly as a country, the rupee should strengthen, but even that strengthening will not be very sharp. We have certain contracts with our customers. But as I said, major appreciation will not be a concern. We cannot just look at the forex gains or losses when we are thinking of the export strategy because the bigger gains come from more value added sales and better realisation on exports. So we would want to increase exports.

There are some issues on margin front at present; do you have any plans to increase the margins? What is the present and future strategy?

If you see our profit and loss along with the balance sheet, while the margins may have come down in last quarter, our balance sheet has improved. It means our inventories have reduced as well. We have been prepared for this; we don’t just want to look at short-term margin correction. We have not stopped certain strategic investments or expenditures which are going to give us returns this year. But we want to get our balance sheet in a much healthier shape. As part of our improvements we would be seeing further reduction in inventory, but that should not be confused with the profitability deterioration. At the same time, we are taking more measures on cost control and improving our execution which should deliver better margins.

As a business plan, how do you see the new government, the new regime coming in? Do you see the confidence in the business world?

Yes definitely, over the medium-term to long-term. What I see is an attitude shift in the government and the way it runs, where you are looking at government as a service to the people and not as some powerful authority. That shift in mindset is what we need because as a business, we are paying taxes, so we expect good services coming from the government in terms of infrastructure, execution of work like formalities and timely execution, governance, transparency and fairness. So we see a more service oriented culture coming into government and that is what I am hopeful about.

Can you give the business prospects for your company for next couple of years? What do you aim in next couple of years?

We definitely have our targets for next 4-5 years long-range plans, they are quite aggressive. I cannot exactly give numbers but there is some confidence that we will be able to adapt in order to scale up in the next couple of years. This would mean growth in topline and bottomline and more customers and more geographic expansion, probably more diverse product portfolio.