Demand is likely to increase in the next two quarters: Anuj Talwar, Talbros Automotive Components

Anuj Talwar, Joint MD, Talbros Automotive Components, talks about what led to good performance in Q2FY21 and his expectation in the next remaining quarters of the financial year, segment-wise demand, export market, PLI Scheme and expansion plans among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: Q2 numbers were exceptionally good, especially in terms of both margin and profit. What were the key reasons and will the same momentum will continue in the future as well?

A: The cost-cutting measures that were implemented from 2018-19 onwards have been very beneficial for us and there was a pent-up demand, also. And a bit thing has come out that due to personal mobility; we have also got a lot of traction in our results. We are a hedge mobility company, who is supplying to every segment, like passenger vehicle, two-wheelers, three-wheelers, commercial, tractors and this has also helped us in the growth. I believe, the momentum will continue in the next two quarters.

Q: Your major business comes from OEMs, which contributes around 73% to your revenue. What kind of levels have you seen in October and November? Do you think that better performance will be seen during the festive season from the demand point of view? Also, talk about the segments which have performed better as compared to the others?

A: October and November numbers are good for us. Our PV segment has shown good results, Maruti is doing very well. Apart from this, the tractor industry has also performed well. We also supply a lot in the CV segment, about 30% and in it our BSVI products – which will increase the value-addition of the company – is about to start. So, we can see an uptick in the CV segment, as it is being said by our OEMs. Also, our exports, which is about 25% of our turnover, is also showing strong signs to us. So, domestic is about 75% and exports are about 25% and the sings are very strong for it.

Q: As you are saying that exports are showing good tractions, so let us about the geographies that are performing better? There is a concern related to the second wave of CORONA across the world, especially in Europe and the US. How it has impacted your business and has it had any negative impact on you? Also, update us about your plans to enter new markets, if yes, then what kind of focus you will have there?

A: We export to different regions, like the US – we have received good traction there; Europe – it is showing good results and we have a lot of exports to the heavy vehicle segment of Europe and it is doing well. So, I don’t think that it will have any major effect but slight slowness is seen December because that is calendar year closure. But our numbers are doing good in the next two quarters, there is no problem.

Q: Do you see any advantage of the government’s PLI scheme, which has a focus on Make in India and boosting manufacturing, if yes, then how will you utilize it and what does it mean for your company?

A: It will be beneficial but we are studying its fine prints at present because we have many divisions in our company, which are exporting as well as serving for the domestic demand. So, if the government releases its fine prints then definitely it will benefit us in the coming future. And, what they are doing is a good thing.

Q: There can be an opportunity for the company to look at acquisitions. How do you see the market from the point of view of M&A? Since you are in the component industry, so are you looking forward to diversifying your business and enter the new products? Also, tell is the kind of focus you will have on the electric vehicle segment?

A: Right now, we will continue to grow organically. I think, a lot of strength is available in the company to grow organically. We have several joint ventures with global companies and, in the last five years, we have started their products in India. In the recent past, we have signed a technical agreement for the futuristic product on Heat Shields, which will be used in vehicles. It is futuristic for EVs as well as hybrid. So, it is a new product for BSVI and it is about to be launched. We are also working with the Indian carmakers to launch this product. And as far as our product lines are concerned, I think, we are okay, maybe it is EV or hybrid, we will be involved in the supply chain. So, there is no problem at all.

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