Kinetic Engineering says EVs, exports to drive Rs 700 crore 5-year revenue target

PUNE : Kinetic Engineering, already in long-term contracts with global auto majors like Renault Nissan, BRP, Magna Powertrain, American Axle, is now focussing on EVs along with exports to drive growth. Typically, electric vehicles need a lot less components than the conventional IC engines. However, transmissions are still required and Kinetic Engineering is betting on its ability to develop different types of gears to power its Rs 700 crore in 5 years revenue target.

Ajinkya Firodia, Managing Director, Kinetic Engineering in a conversation with Financial Express Online said, “Our next stop is Rs 500 crores and then it is Rs 700 crore, whether that will happen over a period of two to three years or will happen over a period of five years remains to be seen because it also depends on our customers and how quickly they adapt but we are looking at our three to five-year plan where we hit Rs 500- 700 crore with EVs driving at least 50% of that business.

Exports and EVs in focus

At the moment exports contribute nearly 50% of its revenue. This is as a result of the several long-term contracts that Kinetic Engineering has inked with key auto manufacturers globally. A major chunk of the exports are to the US and Mexico. Firodia added that the company is also “exporting a lot of the gears to various Renault and Nissan plants in Brazil, Russia, China and Europe. We are also doing business in Europe, where we are selling to a company called Magna Powertrain, some parts in Sweden but the major chunk comes from the US, Mexico, Brazil, Russia and even China. I think we will clock revenues around Rs 150 crore and of the total, 50% is exports”.

Charting out its strategy, Firodia highlighted how the company uses volumes to cushion the overhead costs and margin concerns. He is quite clear that they want to “keep focus on exports, develop more customers and markets and the second vertical being developed will focus entirely on gearboxes. We get all the bearings and seals from outside, we get the castings, we machine them and we have an assembly line and it goes straight on line. We want to upgrade and the volumes have come back. On the back of this, our main new focus is on the EV, because you know the EV segment in India is booming, especially in two-wheelers and three-wheelers.”

Challenges for developing ‘Make-in-India’ EV parts

But what kind of challenges does making parts for EVs pose for auto component manufacturers as compared to ICEs? Firodia explained that the company will be banking on its expertise in making transmissions “to build two verticals within every business focusing on two-wheelers and three-wheelers. We have developed a gearbox cum axles, which goes from electric rickshaws to electric auto variants. We’ve built a new line, revamped our capability in making body parts, we are making chassis, side stands, we’ve set up a new weld shop, new tool and dye room, revamped our entire paint shop. Now we’ve started making chassis for two-wheelers. We can expand it into three-wheelers and they come as fully welded and painted chassis straight to the customers focusing on EVs.”

Firodia pointed out that the “problem with the EV market is that new players need integration facilities because they’re not able to integrate the power-train. It’s not as simple as taking a battery and taking a controller and putting it together. You have to integrate, it needs to work mechanically as well as electronically.” Outlining the company’s future plans, he added that Kinetic Engineering is undertaking a lot of research in this area working with “other partners to come up with a solution, which will work for India, mainly focused on two-wheelers and three-wheelers.”