Key Highlights

The company currently supplies its bearings mainly to passenger car segment, two wheeler segment in automotive sector whereas in non automotive, it supplies bearings to off-highway segment, wind sector, heavy machinery segment, industrial automation and railways. It also supplies to commercial vehicle industry and tractors but in a smaller way. The company is working on with new customers for various new products which will be launched in coming years.

During CY 2016, there were some pressure on sales to after market segments and to distributors due to demonetisation and undercutting issues. However things have improved from thereon and things are getting back on track.

Parent's focus area is only India and there are no plans for higher exports from Indian facility. The export business will remain more or less steady for FAG India.

The company has been continuously increasing localisation every year in line with Make in India ambition. Currently around 80% of total FAG bearings sold by the company are manufactured in-house.

The company incurred a capex of around Rs 35 crore for starting additional manufacturing lines at Savli in Vadodara. Total investment stood at around Rs 80 crore in CY 2016 which includes investments towards R&D site, upgradation of grinding and assembly facility and for future products. The company will expand in advanced wheel bearing segment in CY 2017 given its strong response from automotive sector.

The company is extremely bullish on demand from Railways segment. With contracts being awarded last year, lot of demand for bearings for Railways will emerge in CY 2017.

Overall, management continues to remain bullish for CY 2017 and expects growth momentum to remain strong. Emphasis on localisation, new products, higher demand and higher capacity utilization will lead to higher growth in CY 2017 over CY 2016.