Sterling Tools wants 40% sales from EV biz by FY25

With strong growth momentum in Sterling Gtake E-Mobility Ltd and EV adoption picking up in India, Sterling Tools Ltd’s revenue from EV components is projected to improve to around 40% in the next financial year.

This boost is expected from the EV business mix, a part of the company’s strategy to diversify its operations.

Sterling Tools is India’s second-largest fastener maker for original equipment manufacturers. Its subsidiary, Sterling Gtake E-Mobility, formed in 2020, represents the company’s shift from being involved solely with fasteners. Moreover, Sterling Gtake accounted for 22% of Sterling Tools’ overall revenue of Rs 775 crore in the previous financial year.

“Our share of the EV business in total sales is increasing constantly. This year it could be around 33%, and we are looking at 40% in 2024-25,” Jaideep Wadhwa, Managing Director of Sterling Gtake E-Mobility, also a director at the parent company, told Autocar Professional.

Sterling Tools is banking on the growth in the EV market to scale its business, while leveraging its investments in its engineering team, product innovation, capacity and supply chain to boost growth. The domestic EV industry is likely to grow 40% to 50% every year, and the company expects to amp up its business on the back of the primary market, Wadhwa said.

Currently, Sterling Gtake makes up over 80% of its business through the sale of motor control units for two-wheelers. The remaining is mostly accrued from the three-wheeler business, and going forward, the company plans to make incremental volumes through the light commercial vehicle category.

“Right now, we are mostly into two- and three-wheelers. Next year, there could be a lot of activity in the light commercial vehicle space,” Wadhwa said. Sterling Gtake had started out with commercial vehicle offerings but quickly shifted to two- and three-wheeler businesses, considering the faster EV adoption in those segments. Wadhwa now expects EV adoption in the light commercial vehicle category to increase at a much faster  pace than in other commercial vehicle categories.

“While there is activity on all fronts, volumes will come from two-wheelers, three-wheelers and light commercial vehicles. Those will be our drivers,” he added, also revealing that by end-April, they could announce additional products on the electric powertrain side. “We want to be an EV powertrain supplier or an EV powertrain component supplier. We have an engineering and sales team in place, so adding products makes sense for us.”

Sterling Gtake has one manufacturing facility in Faridabad that made 3,00,000 motor control units last financial year. Its capacity is being expanded for its output to be doubled by the end of FY25. Moreover, the company has allocated Rs 28 crore as capital expenditure this fiscal and plans to spend a similar amount next year, as well.

Recently, Sterling Gtake bagged its first export order — a contract manufacturing opportunity with a revenue potential of roughly Rs 1.5 to 2 crore in the short term.
“I can’t provide details of who the customer is, but it’s in the EV space. The only other hint I can share is that it’s not necessarily in the motor control unit but is an allied product,” Wadhwa said. 

This interview was first published in Autocar Professional's April 1, 2024 issue.