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Sterling Tools To Invest 100 Crore By FY25 From a group perspective, the company will be investing INR 50-55 crore in FY24 and a further INR 55-60 crore in FY25

By Shrabona Ghosh

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The manufacturing unit of Sterling Tools Limited

Sterling Tools Limited closed FY23 at an all-time high revenue for both its businesses: Fastener clocked a revenue of INR 600 crore and its EV business clocked INR 175 crore. Post ten months in FY 2024, the company's fastener business is having marginal growth. "Fastener business will have a growth of 5 per cent this year but our EV business, motor control unit business, will probably clock a revenue of 2x compared with last year, almost 100 per cent growth," said Atul Aggarwal, whole time director, Sterling Tools Limited. From a group perspective, the company will be investing INR 50-55 crore in FY24 and a further INR 55-60 crore in FY25

The auto industry is growing in the passenger vehicle segment, however, the two wheelers and commercial vehicle segments are flat.

About 25 per cent of Sterling Tools fastener business revenue comes from passenger vehicles, about 30 per cent from commercial vehicles, 20 to 25 per cent from two-wheelers, 10 to 13 percent from farm equipment and aftermarket is another 13 to 15 per cent. "The PV industry may have grown faster than 5 per cent but others have flat growth or negative growth, such as the tractor segment which is down may be 11 to 15 per cent and the end forecast is also not looking very good," he added.

The farm economy numbers have been weak since Covid times and has impacted the tractor segment. Similarly, being a commuter product, heavily dependent on farms, the two-wheeler segment has shown flat growth. However, the passenger vehicles had a great run for two - three years. "It's a function of the middle-income and above. There's a lot more disposable income with them and there's been a lot of wealth creation for these segments of the economy. The shift from Sedans to SUVs also has a role to play. Commercial vehicles did well in FY18 - 19 and post that, industry fell by almost 60 to 70 per cent in the year after and then the pandemic created further slump. FY23 was great for commercial vehicles, the numbers are still strong, but there was expected growth of about 12 to 15 per cent in this industry, in the segment this year, which is not looking very good. Maybe, they'll have a 3 to 5 per cent growth only. And that's again a function of the state of the economy in terms of freight capacity addition, etc," the director added, explaining the multiple factors impacting the auto industry right now.

After signing a technology transfer agreement with China's Jiangsu GTake Electric Company, Sterling Tools set up a subsidiary – Sterling GTake E-Mobility – to bring state-of-the art EV technology to its customers in India. In the next three years, the company aims to make its EV business as large as its fastener business. Sharing insights into its EV expansion strategy, Jaideep Wadhwa, MD, Sterling GTake E-Mobility Limited, said, "Currently, we manufacture motor control units, which is a critical part of the EV powertrain. We are doubling our capacity to 600,000 motor control units a year from existing 360,000 units, by the end of this fiscal year. In addition, we are looking at other products and we hope that by the end of March this year or the end of this fiscal year, we'll be able to announce a couple of new ventures in the EV powertrain space that will strengthen our position within the industry and make us a preferred supplier to EV customers."

The company exports products from its fastener business. This has reached a maximum of about 10 per cent of total revenues. "It's not as high now. On the motor control units or the EV side, we do have some export inquiries and opportunities, but it is not our main priority. The Indian industry is growing fast and requires much attention and engineering support, that our entire focus right now is on the Indian market and any exports that we do in the EV business, or the motor control unit business is more opportunistic than strategic at this stage. This may change in times to come," Wadhwa explained.

The company is planning to invest INR 28 crore in FY24 and will be looking at a similar number for FY25, "This is without expansion into other product ranges. So over FY24 and FY25 we will be spending upwards of 50 crore in the electric or the Motor Control Unit (MCU) business." Wadhwa added.

For FY23 and for FY24, 30 per cent of revenue is coming from motor control units, 70 percent from fasteners, "We want to take that number to 50-50 in the next couple of years," said the whole-time director.

Shrabona Ghosh


A journalist with a cosmopolitan mindset. I lead a project called 'Corporate Innovations' wherein I cover corporates across verticals and try to tell stories on innovations. Apart from this, I write industry pieces on FMCGs, auto, aviation, 5G and defense. 
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