Sansera Engineering Ltd sets aside INR 300 crore for capacity expansion in FY24

Sansera Engineering Ltd is a precision-forged and machined aluminium components manufacturer that caters to both auto and non-auto segments. The company is planning to invest INR 300 crore in FY24 for capacity expansion and line balancing to cater to the growing order book.

The facility is designed to house all the aluminium forged and machine product categories of components, aligning with the company's long-term sales contribution target of 20% for xEV and tech-agnostic products.

Vikas Goel, CFO of the company, informed investors during the Q1 FY24 earnings call that the majority of the capex would be in the non-auto and Auto-ICE categories. It aims to deliver upon the growing order book and spend part of the capex on the machining facility, which is under construction.

The Chairman & Managing Director, S Sekhar Vasan, stated during the company’s annual review meet: “To support our growth in the non-ICE segments, we invested ₹244 crore as capex in 2022-23, for technological upgradation and adding production lines. We expect to spend a similar amount in the current financial year.”

“We also initiated the construction of a new facility for the machining of parts at our existing plant in Bidadi. This brownfield expansion project is expected to be completed by the end of this year and will enhance our presence in the tech-agnostic and xEV segment, including aluminium components,” he pointed out.

Sansera Engineering secured INR 370 crore worth of new orders during Q1 FY24, with the annual peak revenues standing at INR 1,690 crore as of June 2023. Around 70% of the new order inflows came from the auto-ICE segment, while 21% was from the autotech agnostic and xEV segment, and the remaining 9% was from the non-auto segment.

Sansera Engineering has been focusing on tech-agnostic and xEV for the past few years. It has been working with leading domestic as well as global customers. In the last decade, the company's revenue and profit after tax have grown at a CAGR of 16% and 20%, respectively.

Sansera Engineering has devised a 4-pronged growth program to diversify into tech-agnostic products and cater to the xEV opportunity, consolidate and strengthen the global market share in the existing portfolio, focus on leveraging existing capabilities to diversify further into non-automotive businesses and expand the addressable market, and retain and strengthen technological leadership through continued focus on engineering capabilities. The company has 16 factories across India and one in Sweden, located near the OEM production facilities.