Pricol kicks in growth mode with EV, new business, export and capacity addition, Auto News, ET Auto
Chennai: Coimbatore-based auto parts major Pricol is on a growth blitzkrieg. The company is planning to expand its EV footprint, tie up joint ventures and tech agreements with global players for its sensor and connected vehicles solutions, nearly double production capacity and exports ahead of its organizational restructuring which will “commence in April 2022 and end by March 2023,” said MD Vikram Mohan.
Armed with a capex of around Rs 600 crore for the next three years, the company is looking to increase its capacity value from Rs 2,200 crore right now to Rs 4,000 crore even as it works towards becoming a long-term debt free company in the next 12 months by wiping out the Rs 100 crore debt on its books right now.
“Our DIS (driver information system) business, which contributes 50% of our revenue, will continue to be relevant for electric vehicles, but we are moving up the value chain into connected clusters, navigation, vehicle management system apart from developing controllers for both EV and ICE vehicles as well as battery management systems,” said Mohan.
The company is in advanced talks with American and European partners for joint ventures and tech agreements in the battery management, sensor and connected cluster segments to get into higher value products and increase its EV product range. “Currently EV is 5% of revenue, but we are targeting 15% by 2025 and are working with both ICE players getting into EV as well as new all-electric names,” he added.
The Rs 600 crore investment – 50% debt and rest internal accruals – in products, new technology and capacity will also help Pricol service its Rs 2,000 crore current order book. The company is not only adding capacity at its Sri City, Pune and Satara factories, it is also ramping up its R&D muscle. “We will spend around Rs 60 crore in a world class technology centre in Coimbatore for 400 engineers complete with endurance and test labs,” said Mohan.
As for exports, the target is to double revenue contribution from 10% now to 20% by 2025 on a topline of Rs 4,000 crore driven by the pump business, he said. The company is looking at becoming a more dominant player in the sensor business and is looking at a JV in this vertical. It is also adding capacity for the offroad business which is primarily export driven.
Pricol is currently working on a restructuring plan as part of which its three main verticals will become separate companies under a listed holding entity. “Pricol will continue to be the listed entity under which there will be a company focusing on the DIS and connected vehicle solutions business, and another focusing on the sensor business and the third on controllers and fluid management system business,” said Mohan. Pricol will hold 100% or 49% or 70% stake in each of these entities, he said. This process will be complete by March 2023.