Sona Comstar raises capex to Rs 1,200 crore for EV biz
With a brimming orderbook worth Rs 22,000 crore, the India-based global manufacturer and supplier of auto components looks at enhancing production capacities with investments.
Gurugram, India-based global automotive systems and components manufacturer Sona Comstar has increased its capital expenditure by Rs 100 crore, bringing the total close to Rs 1,200 crore over the next three years. This development occurs at a time when the company's net orderbook has increased to Rs 22,000 crore, with approximately 78 percent of the total coming from the electric vehicle (EV) segment.
Rohit Nanda, the Group Chief Financial Officer, said, "We have a strong capex lined up. For the current fiscal and next two years, our total capex was earlier planned at Rs 1,000–1,100 crore. We recently added Rs 100 crore more, which takes it to around Rs 1,200 crore." Most of the capex allocated would be used for building capacities, he said. Capacity expansion will take place in the electric vehicle (EV) business and will see increase in the manufacturing of traction motors and motor controllers. Similarly, the booming driveline business is operating at full capacity and there’s scope for expansion based on the current order book in the segment. The company also plans for capacity development in the differential assembly business. According to the company, three programmes went into production during the preceding quarter of Q1FY24: two in the motor sector and one in driveline, bringing the total active programmes to 23. In addition, the company added four new EV programmes and one new EV customer to their orderbook during the reported quarter.
The first is a differential assembly programme for a class five electric truck for a new North American customer. This initiative has contributed Rs 405 crore to the order book, and production will most likely begin in Q4 FY25.
The second is a large-volume traction motor order worth Rs 360 crore from an India-based two-wheeler OEM. The company will make hub-wheel traction motors for their next electric scooter model and production is expected to begin in Q4 FY24.
'We have a strong capex lined up. For the current fiscal and next two years, our total capex was earlier planned at Rs 1,000–1,100 crore'
Rohit Nanda, Group CFO, Sona Comstar
The third new EV job comes from an Indian OEM of electric OHVs and three-wheelers for the supply of mid-drive traction motors and controllers for their future electric OHV model. This programme is worth Rs 90 crore and production is expected to commence in the fourth quarter of FY24.
In addition, the company has secured a global order worth Rs 430 crore from an OEM of recreational off-highway vehicles for final drive differential assemblies. This order win marks Sona Comstar's entry into a brand-new mobility category, recreational OHVs and manufacturing is expected to begin in Q2 FY25.
Nanda emphasised that the new orders should be seen in context of the fact that, until two years ago, the company's driveline business used to cater only to passenger vehicles in the electric vehicle space. Their motor business, on the other hand, had barely begun in EV, with just a couple of EV programmes contributing literally next to zero revenue.
Meanwhile, Sona Comstar recently signed a technology licencing agreement with Equipmake, a UK-based technology company that has developed high-performance electric powertrains. Under the agreement, Equipmake will licence patented spoke motor and inverter technology in the power range of 100 kW to 440 kW to Sona Comstar to manufacture and sell EV powertrains, sub-systems, and components for electric cars, buses, commercial vehicles, and off-road vehicles. With this deal, Sona Comstar gets exclusive rights to sell drive motors, inverters, and drivetrains for the target applications in the licenced territories of India, Thailand, and select South Asian markets. The company will manufacture drive motors, inverters, and drivetrains for the target applications, supply them to its customers in the licenced territories, and Equipmake for other markets.
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