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Sterling Tools' Records 90% Growth In EV Business In FY24, Sterling Tools reported INR 600 crore plus revenue in fastener business and INR 325 crore in the company's electric vehicle control units

By Aditya Pran Mahanta

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As a leading fastener manufacturer in India, Sterling Tools has been a significant player in the automotive industry for over four decades. The company's recent pivot towards electric vehicles (EVs) and advanced electronics marks a noteworthy shift aimed at staying relevant in an evolving market.

"We were able to find a lot of success for our motor control unit business, which is part of the electric vehicle (EV) supply chain industry and today we are the leaders in that product line. The largest market share in that segment, we are also identifying new projects," stated Atul Aggarwal, MD, Sterling Tools in an exclusive interview.

Sterling Tools set up a subsidiary – Sterling GTake E-Mobility – to bring state-of-the art EV technology to its customers in India. GTake E-Mobility manufactures design-to-delivery motor control units for electric vehicle powertrains. These units serve to facilitate the smooth interaction of the user, motor and battery in the production of the desired performance outcome.

Alliance with Yongin Electronics

The company is announcing new ventures with Hyundai and Kia, hence, further extending its reach into the EV supply chain. It is also trying to harness collaboration with partners for new product development so as to bring even more innovation into the market.

Some of the big bangs for Sterling Tools have been its Memorandum of Understanding with Yongin Electronics, a Korean supplier of magnetic components to Honda and Kia. This partnership is further going to bring to India a new product line for augmenting the company's capabilities and market reach. Explaining this point, Aggarwal said, "We will probably start building the plant sometime next year and the revenue for this business will start coming in FY26."

Localisation of production

With an engineering and software development setup located in Bangalore, the company invests resources in its tech centre. "We build our own software from scratch and upgrade the software as per customer need. Almost 50 per cent of our human resources in the business are all in engineering and software development," said Aggarwal.

The company elucidated that it had localised substantially, speaking in terms of hardware, Aggarwal stated, "We have localised substantially beyond the norms given by the government or the customer. The only parts which still come from overseas are semiconductors. Those components still have to come from overseas and as and when the ecosystem builds for semiconductors in India, we hopefully will not be buying them overseas."

Financial performance and investments

The BSE and NSE listed company is up by 30 per cent in revenue, close to INR 1,000 crore, with almost 90 per cent growth in the company's electric vehicle (EV) business. "The revenue is close to INR1,000 crores, we were up 30 per cent in revenue over last year, I think we had almost 90 per cent growth in our EV business product lines and we grew very marginally in our fastener capital. Overall, we were up close to 30 per cent," Aggarwal added. He said that the fastener business had brought in more than INR 600 crore, while the EV control units had managed to give them close to INR 325 crore.

From a group perspective, the company will be investing INR 55-60 crore in FY25, the company had told Entrepreneur India, in a previous interaction. Sterling Tools exports products from its fastener business and 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," Jaideep Wadhwa, MD, Sterling GTake E-Mobility, had said earlier.

Expectations and growth

Going forward, the company is looking at government support to boost the EV ecosystem, which will help fasten its adoption rate and sustainable growth through initiatives like facilitating large-scale battery production, electronics development, and promoting consumer adoption. The government's previous schemes, FAME (faster adoption and manufacturing of hybrid and electric vehicles) One and FAME Two, have subsidised EV prices, and the company hopes for continued support to drive sales volume and make EVs more attractive to consumers. As the industry grows, economies of scale will improve, reducing costs and eventually making subsidies unnecessary.

The company remains resolute to add more and more to its portfolio in the electric vehicle ecosystem. "Our roadmap head is to build a portfolio of adding more components for the electric vehicle ecosystem. We expect government's support in the electric vehicle ecosystem," Aggarwal concluded.

Creative head with a passion for crafting engaging and compelling content. My segment, Business Dynamics, cover mid sized companies and dives into their business perspective.

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