Electric mobility represents a large global opportunity with the segment gathering pace over the next few years, according to auto component major Bharat Forge.
Addressing shareholders in the company’s annual report for 2018-19, Bharat Forge Chairman and Managing Director B N Kalyani said the company has started making inroads in the segment through stake acquisition in Tork Motors and Tevva Motors to scale its capabilities and gain access to R&D knowledge base.
The company has also set up a research and development (R&D) centre on its own, he added.
“This (electric mobility) represents a large and growing global opportunity… Over the last couple of years, we have worked on this segment by putting together building blocks at the component, system and technology levels. We expect activity in this segment to gather pace in the coming years,” Kalyani said.
The electric vehicle segment is at a nascent stage with concerns about capital allocation and strategies, he added.
“Extensive R&D will be required to arrive at the right technology solution. This will involve large investment in people, capital and supply chain enhancement. This makes India an attractive destination given its low-cost advantage; and Bharat Forge, a prospective partner given our proven capabilities and quality focus,” Kalyani said.
This is a huge opportunity that requires the right strategies to move ahead and succeed, he noted.
On the business outlook, Kalyani said the company expects to witness fairly volatile and uncertain demand environment across sectors and geographies.
“The company’s focus in the coming 12-18 months shall include reducing cost, accelerating new product development, maximising free cash generation and exploring organic/inorganic growth avenues,” he added.
Kalyani said the company used to be predominantly in the automotive business a decade ago.
“However, we took a conscious decision to move out of this position and with steadfast focus, we built a multi-sectoral, globally diversified organisation with additional revenue verticals that drive newer opportunities. This has steered us towards a model which is more resilient and we continue to further strengthen it,” he added.
A part of the Kalyani Group, a USD 3-billion conglomerate with 10,000 global work force, Bharat Forge has presence across various sectors like automotive, railways, aerospace, marine, oil and gas, power, construction and mining.