Schaeffler India to leverage IT infra, competence available in India for solutions in global mkt

Schaeffler India is looking to leverage the IT infrastructure and competence available in India, which offers a high level of cost competitiveness, to develop solutions for the global need as well as for the domestic market, a top company executive has said.

Schaeffler India Managing Director Harsha Kadam said that in the past two years, Schaeffler group has focused on bringing in the research and development (R&D) competence in India and a consistent level of investment.

The domestic arm of the German automotive and industrial major, Schaeffler, last week reported a whopping 67 per cent growth in net profit to Rs 141.70 crore for the December 2020 quarter. The revenue increased 23 per cent to Rs 1,274 crore with the mobility component business growing by 25 per cent during the the fourth quarter of 2020. The company follows January-December fiscal.

''In the last two years, the Schaeffler group has focused on bringing in the R&D competence in India, and there is a consistent level of investment that has been made in the design and development, infrastructure and people competencies, both here in India,'' Kadam told PTI.

Stating that the group is now taking it to the next higher level by bringing in the mechatronics competence as well, he said, ''we strongly believe that we must leverage the IT infrastructure and the competence that's available in this country.'' It brings in a high level of cost-competitiveness to develop solutions for the global need as well as for India from here, Kadam added.

He attributed the good performance in December 2020 quarter to counter measures that the company implemented during the lockdown besides other factors, including a clear focus on sales revenue generation, strict cost control and spend as well as taking the projects to closure.

The group is committed to developing and growing shaffler India as a potent, strong player, he said adding, ''I am sure it is going to play a major role in the R&D efforts of sheffler, at least in the Asia-Pacific region.'' Asia-Pacific is a big market where Schaeffler can grow its business substantially, he said.

Schaeffler India Director Finance and CFO Satish Patel said India is strategically important and there is a strong focus from the footprint point of view that the company has expanded over the years.

''There are further plans to expand footprint in India, focussing on both domestic market as well as exports. So, from the Schaeffler group's point of view, India is a focussed market because of the growth opportunities and the cost base,'' Patel said.

The high level of investments that are coming into India will continue in the next few years as well, said Patel adding that the company will see more of its export business growing going forward.

Developing solutions for the global markets is enabling the company to offer the next generation of technology and digitalisation to its local customers here, but also work with global partners as well, said Kadam.

It offers a big opportunity for cross learning between what is happening in the rest of the world, why can't it be done in India.

It is logical to have the R&D footprint in this part of the world. ''So that you know, the leap time to develop the projects, and take the projects to a quick realisation to business can be faster than what we have been doing in the past '' he said.

Moreover, the design approach can be a cost-driven approach, rather than a feature-driven approach, said Kadam.

''And, that's where we believe we will have an advantage,'' he added.

Pointing out that Schaeffler India has been increasing capex (capital expenditure) year after year, Patel said that in the financial year 2020, the capex spend stood at around Rs 212 crore with no capex spend in one quarter as against around Rs 335 crore in 2019.

Going forward, the capex is expected to be in the range of about Rs 300-335 crore, and a large amount of this would be utilised to spur gtowth, including capacity, localisation and enhancing exports, he said.

''That's how we have been actually spending on capex in the past few years and we will continue to do so,'' Patel added.

He added that currently, as much as 10 per cent of Schaeffler India's revenue comes from exports, which are expected to grow significantly as it takes the business forward.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)