Greenfuel Energy Solutions, a Gurugram-based manufacturer of high-pressure components for Compressed Natural Gas (CNG) engines, is expecting to touch Rs 1,000 crore in turnover in the next four years. The company plans to expand its hydrogen and lithium-ion battery businesses while stepping up its core CNG conversion kit domain, a senior company executive told Autocar Professional. 

This move comes in the wake of a significant decline in demand for CNG vehicles in the last two years due to persistently high gas prices that pushed the company to look for another source of revenue. 

"We are aiming for Rs 1,000 crore in turnover by the FY28. We are looking at entering new product categories in the hydrogen segment and also increasing our reach on the battery side. I strongly believe that hydrogen as fuel for commercial vehicles can lead to zero-emissions, which is why we are focusing on developing ICE technology first and then focus on fuel cells,” Akshay Kashyap, Managing Director, Greenfuel Energy Solutions, told Autocar Professional. Meanwhile, the company will be spending about Rs 100 crore on capex and R&D of new products.

Despite the skyrocketing retail price of CNG, the auto-ancillary maker closed FY23 at Rs 230 crore on the back of new orders of high-pressure components for hydrogen ICE vehicles from companies like Reliance, Ashok Leyland and Olectra, and also opened doors for exports of CNG conversion kits. In the current fiscal year, the company expects to clock a turnover of Rs 400 crore as it aims to launch its hydrogen internal combustion engines (Hydrogen ICE) in the second half. The company showcased its maiden hydrogen ICE at the 2023 Auto Expo. 

Moreover, Greenfuel energy also plans to invest significantly in the in-house development of hydrogen technology by 2025. "Currently we are developing technology to meet the new emission standards. This technology will be used in CVs, off-highway and marine applications. At present, we supply hydrogen sub-system equipment that can be directly installed in vehicles. We intend to be an end-to end solutions provider in hydrogen, " Kashyap highlighted.

CNG concerns
For Greenfuel Energy, both CNG and hydrogen are part of its gas fuel division, which generates around 65 percent of the company’s total business. Batteries comprise 30 percent of its business, and the remainder comes from selling accessories. According to Kashyap, the CNG and battery systems will continue to be the mainstay for the company in the near term, as the expansion of its hydrogen segment needs the right policy incentives and infrastructure investments. 

The company sees good pickup in its battery segment and aims to grow it to 45 percent of overall revenues. It supplies batteries to PV, CV, and premium two-wheelers, sales of which the company expects to grow manifold in the coming years. 

On the CNG front, the company, however, took the hardest hit in the last two years. There has been a huge drop in the number of CNG system assemblies, for both PV and CV, from 25,000 per month to 15,000 at present, Kashyap mentioned. 

He further stated that in FY22, 50 percent of the commercial vehicle trucks used to run on natural gas, and that number has come down to less than 10 percent last year because of the CNG price hike. “When there was a decline in the commercial vehicle segment, we were able to get some export orders and also did a lot of work with hydrogen, and because of these, we made up for the deficit in revenue," Kashyap added. The company is supplying its CNG systems to Maruti Suzuki, Tata Motors, Ashok Leyland, Volvo Eicher, and SML Isuzu, and is doing a good deal of development work in-house.

However, with the recent reduction in CNG prices, the company hopes to be back on track soon. "The good news is the spot price of LNG has come down from US$ 45/MMBtu to US$ 14/MMBtu. Also, with the recent revision, the price gap between CNG and diesel has come down to less than Rs 20, which will ultimately push the volumes of CNG vehicles this year,” Kashyap added. 

Expansion plans
Greenfuel Energy's state-of-art plant in Manesar is a 150 megawatt battery facility that is currently running at 60 percent utilisation. Looking at a considerable market in the electric vehicle domain, the company aims to double this capacity to 300 MW in the near term. “We are exploring battery technologies that we can take to other parts of the world. With heavy adoption of e-mobility in three-wheelers, two-wheelers, and cars, we are aiming to touch 300 megawatts in the next 1.5 years,” Kashyap said. 

Established in 2006, the company started manufacturing lithium-ion batteries in 2016. After two years of R&D in thermal management and an investment of up to Rs 7 crore, the company currently holds four patents in battery pack technology. 

Besides, Greenfuel Energy is also scouting for land in the same region to set up another plant as it sees a steep rise in stock-keeping units (SKUs) for CNG kits and hydrogen panels. Citing the reason for choosing the same location, Kashyap said the company wants to set up a factory in proximity to its largest customer, Maruti Suzuki. 

However, the company is at strategic crossroads, as the prices of industrial land parcels have worryingly shot up by 30 to 40 percent. “Around 45 percent of our CNG business comes from Maruti Suzuki. But the land prices in Manesar presently are prohibitive for the industry, and we are forced to move further away. Nonetheless, we are still hoping to get a good deal here,” Kashyap said. 

Eye on exports
The export market is relatively new for Greenfuel Energy. The company first ventured into this space in Africa, where it has already supplied its CNG conversion kits. Chalking out a strategy to enter more international markets, Kashyap said that it is looking for countries where gas prices are substantially lower than conventional fuel prices. Without disclosing the regions, he mentioned that Greenfuel Energy has bagged two major trial orders from overseas. “We started exports last year, and our demonstration projects are currently live in some countries. I hope they will be converted to mass orders very soon this year,” Kashyap said.