2012 Electronics Special: Indication Instruments aims for speedy expansion

Modern electronics are fast driving comfort not only in passenger cars but also facilitating a smooth driver workplace in commercial vehicles and construction and farm equipment.

In line with this trend, Indication Instruments Ltd (IIL) is mulling investments of Rs 45 crore on sprucing up its product line and also setting up a greenfield facility at Faridabad dedicated to automotive electronics. At present, it has a single plant which makes a mixed product basket of mechanical gauges and automotive electronics.

Since electronics constitute about 35 percent of its current sales and are recording the fastest growth rate, IIL's thrust is on expanding its product portfolio further. This will spawn five new displays (including 7-inch and 10-inch displays), body control modules, 10 new electronic instrument clusters, electronic pressure sensors, in-house development of TFT modules as well as Tier 2 electronic control modules for other electronic products.

To facilitate this, the company’s embedded systems engineering group will be beefed up to 50 people from the current 15. It will be supported by the engineering team in the US from sister concern Veethree Electronics and Marine, LLC in Florida. Veethree was acquired in 2009 and also services the marine segment.

Currently, IIL has a product portfolio of electronic instrument clusters, CAN displays and controllers, interface modules, standalone electronic gauges and switches and caters to CV, farm and construction equipment as well as stationary engine OEMs. Its current production capacity is six million instruments and sensors per annum.

IIL recently launched an electronic instrument cluster for Tata Motors’ trucks, designed jointly with the OEM. The product includes an end-of-line programmable stepper motor-based speedometer and tachometer, with a provision for providing inputs to the engine control unit to shut down the engine in case of failure. Failures can include high engine coolant temperatures, low oil pressure, low air pressure, low fuel level, parking brake failure, battery not charging, seat belt and tilt cab lock not engaging.

Managing director Vishal Lalani(pictured) says that this cluster is being implemented in a phased manner across all of Tata’s medium and heavy trucks as part of the Ergo Pack upgrade and will bring in additional revenues of Rs 20 crore per annum. IIL is also targeting supplies to Mahindra & Mahindra’s single-cab pick-ups and tractors.

At present, two SMT soldering lines that form part of the group’s in-house manufacturing capability are available only in the US. These will be supplemented with additional lines for assembling printed circuit boards for the first time at the upcoming plant at Faridabad. These new assembly lines will be equipped with vision inspection, robotic stations and PC-based data acquisition systems. The new plant, slated to go on stream by end-2013, will have a production capacity of 300,000 electronic clusters and 500,000 PCB assemblies per annum. It will also house an R&D centre for auto electronics. About 50 percent of the group sales currently accrue from the US. A sales office and warehouse in Illinois further helps market India-made products to OEMs there.



Gunning for M&As

According to Lalani, the group is now eyeing mergers and acquisitions in Europe to help it expand its customer base. This will also facilitate diversification into a plastic injection moulding and toolroom facility in India supported by a satellite unit in the US or Europe through acquisition. The acquired company will be in the $10-20 million range with the deal expected to be completed over a year. With the number of plastic parts in components rising, the need for a cost-effective captive unit is being felt as plastic imports from the US are expensive.

With the planned growth, the group companies are targeting a topline of Rs 180 crore in FY’13 of which Rs 100 crore will accrue from the India operations. Last fiscal they together notched revenues of Rs 150 crore of which IIL contributed Rs 86 crore.

SHOBHA MATHUR