The Murugappa Group's engineering firm, Tube Investments of India (TII), is focusing on a set of businesses to reduce its dependence on the auto sector and its cyclical nature.
The company sees a lot of opportunity in its present business mix, which it intends to expand in future.
With its presence in engineering, metal formed products and bicycles, products addressing automotive, railway, construction, mining and agriculture sectors among others, it has forayed into TMT bars and truck body building businesses of late.
The company is exploring opportunities in optic lenses and other vision systems for the auto industry.
The TMT bars and the truck body building businesses are more like venture capital investments at the incubatory stage, which need time to grow and will therefore not have any significant impact either on its topline or bottomline in near term.
The truck body building business is planning to shift from the outsourced model of operations and to set up its own manufacturing facilities in Chennai, Bawal, Chakkan and Kolkata for product development, standardisation and scalability.
The initial infrastructure has been created in the optic lens space and the production is likely to be ramped up in the coming year. Acquiring capabilities to manufacture vision components would provide leverage towards climbing the value chain which supports multiple sectors and industries.
Under the metal formed business, the company has successfully completed three new car door frame projects for Hyundai during FY20.
The sale of automotive chains dropped by 12 percent and industrial chains grew by 10 percent when compared to 2018-19 in volume terms.
Doorframe sale volumes were lower by 16 percent during 2019-20, as against the passenger car segment’s contraction of 15 percent due to higher sales on select models with two auto majors.
The company has also developed new products for BS VI automobile segment to counter the downward trend.
Meanwhile, under its railways business, the company has started supplying parts to Metro train manufacturers in the country for the coaches plying both in India and overseas. It also launched 70 new bicycle models during FY20, with expansion in the entry level, economy range portfolio.
It has also refreshed and launched 53 models to improve performance of the business segment where it has exited the institutional business earlier.