Joint Managing Director Sriram Sivaram says that MEI is trying to strike a balance between domestic and export revenue in the ratio of 50:50 in the coming years.
Madras Engineering Industries Pvt. Ltd. has drawn up plans to grow its revenue by threefold and increase its exports to 50% over the next few years, said a top executive.
“At present our revenue is about ₹800 crore and we have been growing at the rate of 15-20% YoY,” said MEI Joint Managing Director Sriram Sivaram during an interaction.
The city based auto parts manufacturer is aiming for a topline of ₹2,500 crore by 2030-32 through systematic investment of capex every year to increase its production capacity. On an average, MEI has been investing around ₹30 crore on expansion every year over the past decade.
“The asset to turnover ratio of most Indian auto component firms is typically between 2-4x. We currently have a net fixed assets of approximately ₹200 crore and we would need to make fresh investments of over ₹200 crore as we grow. Fundamentally, the funding will come from internal accruals,” he said.
MEI has manufacturing plants in and around the city that produces Slack Adjusters, Clutch Boosters, Air Disk Brakes (ADB) and Castings. It is the largest producer of Slack Adjusters globally and this product line contributes to approximately 50% of its overall revenue, while ADB business is growing slowly. Castings are sold both in the domestic and overseas market, while Cluster Boosters are sold in India alone.
“Right now, 60% of revenue comes from domestic market and 40% through exports. We are trying to strike a balance to have 50:50 over the years. As we are trying to grow our business by 3X, Air Disc Brakes contribution will grow to over a third of our business,” he said.
Mr. Sivaram said that MEI in association with IIT-M has developed truck ABS system that is currently undergoing validation and testing.
“Globally, only two firms ZF-Wabco and Knorr-Bremse are active in this $10 billion market. We are trying to penetrate this market segment which offers huge potential and we have already started talking to our customers,” he said.
MEI shot into limelight recently as it was one of the three city-based firms selected by Volvo group for sourcing fossil free castings. “Within a year, we will secure green certification for all our products,” he said.
On sustainability, he said that they have already achieved 75% in water consumption and 90% in power consumption. MEI hopes to achieve carbon neutrality and water neutrality by 2030.
