Talbros Automotive Components has proposed a capital expenditure of Rs 205 crore over the next three to four years to expand capacities across its businesses. The capex also resonates with its intent to double its group revenue to about Rs 2,200 crore by FY27.
The company received multi-year orders worth more than INR 1,000 crore in FY23 from local and foreign clients for all of its product areas, joint ventures, and business divisions. These contracts, which include the company’s product lines such as gaskets, heat shields, forgings, and chassis, will be carried out over the next five years.
The auto component company will spend Rs 50 crore in the gasket and heat shield business, and the expansion plan includes setting up a separate line for new generation heat shields to ensure delivery to Maruti, Hyundai and Kia. The company is expected to grow at a CAGR of 14% over the next four years, with sales rising from an estimated INR 423 crore in FY23 to INR 700 crore by FY27. The forging industry would receive INR 60 crore investment.
Talbros will establish a new machine facility and expand its selection of products to include heavy-weight components. This company supplies prestigious businesses and has a significant international presence. Additionally, the company will concentrate more on EVs moving ahead. The forging industry is predicted to expand over the next four years at a CAGR of 23%, with revenue rising from roughly INR 215 crore in FY23 to INR 500 crore in FY27.
Marelli Talbros Chassis Systems (MTCS), a 50:50 joint venture between Talbros and Marelli Suspension Systems SpA, with an 80 crore INR investment budget is establishing a new facility in Gujarat to take advantage of both the domestic and international developing markets. In the upcoming years, this industry will also put a bigger emphasis on electric vehicles. MTCS, a significant participant in the control arms and connections market, projects that its revenue would increase from an expected INR 210 crore in FY23 to INR 700 crore in FY27 at a CAGR of 35%.
With a 50:50 joint venture with Marugo Rubber, Talbros Marugo Rubber, and Nippon Leakless Talbors, a 40% joint venture with Japan’s Nippon Leakless Corporation, the business will spend the remaining capital expenditures. The different corporations will use internal accruals and some borrowing to pay for the capital expenditures.
The company hopes that the projected expansion program, developed as part of its Talbros 2.0 development strategy, would enable it to more than quadruple its group revenue, from an estimated INR 1,016 crore in FY23 to around INR 2,200 crore by FY27. The percentage of EV business in total group revenue is likely to increase from the present 2% in FY23 to 12% in FY27 since there will be a greater emphasis on EV business. Additionally, the export share will increase from 25% to 35% of the overall exports.
