We have a topline target of Rs 2,500 crore: Nishant Arya, JBM Group
Our clientele will revolve around those who are present with us. However, we are reaping the benefits of the new platforms of different vehicle makers like Mahindra, Ford, Royal Enfield, Volvo, Eicher, Maruti Suzuki and Tata Motors, said Nishant Arya.
Nishant Arya, Executive Director, JBM Group, in an exclusive interview with Swati Khandelwal, Zee Business, spoke about different divisions of the company and his outlook on them. Edited Excerpts:
Q: JBM auto has seen a volume growth of 10-12 per cent in the quarter ended in September 2018. Can you let us know about the growth score in bus and tool divisions? Also, provide little information on different segments where you are functional including where the highest growth is visible to you?
A: JBM Auto is functional in three divisions and they are component division, tool division and bus division.
Component Division - The growth has been subdued in the division as we had a special focus on operational efficiency, value-added engineering and increase in asset turnover, where asset utilisation factor is going up in the coming quarter. We are well prepared to face it.
Tool Room Division - Similar activities were undertaken in the tool division - higher profit margin division for JBM auto - in last financial year. There was a considerable addition in the top line and we expect that the division will grow by 50 per cent in this year when compared to its last year's performance, which stood at Rs87 crores in the top line. This means the top line will stand near Rs120-125 crore.
Bus Division: We have an order book of 200 buses. Interestingly, 50 buses have been delivered in the quarter and it has a top line contribution of Rs35 crores. Remaining 150 buses will be delivered in the remaining quarters of the ongoing fiscal and will help in getting a topline contribution of about Rs140 crores. In addition, certain orders are in pipeline and are being tendered, which can add to the health of the company in the financial year. We hope that we will be securing a good order book for the upcoming financial year too.
If it comes to the overall organisational health than we are looking at a top line of Rs2,500 crore as the ongoing year, which is a transformational layer for JBM auto. At the same time, we are trying to see at how, we, the company, will be able to create high value for all our shareholders and stakeholders. This is a reason that we merged different companies namely JBM auto system and JBM MA in JBM Auto to create better value and better operational efficiency and not to duplicate cost.
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Q: Ford and Toyota supported your order book in the last two quarters. Let us know about the new additions in the clientele list in this quarter and where it can reach by end of the fiscal?
A: Our clientele will revolve around those who are present with us. However, we are reaping the benefits of the new platforms of different vehicle makers like Mahindra, Ford, Royal Enfield, Volvo, Eicher, Maruti Suzuki and Tata Motors among others. In fact, we have taken a considerable business from them and hope that we will be benefitted from their new SOPs in upcoming quarters. Fort instance Mahindra has launched a new product in Q3 and we are seeing a good pickup in that model. In addition, there will be a pick up in tractor and three-wheeler segment, where JBM Auto is functional, due to demand and an increase in export volume, which will add to the growth of the company.
The component division will have a contribution of Rs2,100-2,200 crore in the top line of Rs2,500 crores in Q3 and Q4. The remaining contribution will be made from the tool and bus division.
Q: JBM Auto imports batteries to support its electric vehicles where raw material costs are too high. Did rupee depreciation had an impact on your cost in the battery business?
A: Rupee depreciation didn't have a huge impact on our business as we tried to enhance our battery efficiency and density. Further, this will be compensated from the product performance. At the same time, we are also trying to find ways to optimise our product more. In addition, we have also gone for higher localisation for higher voltage electronics for different kind of motors and charging systems, which will help us in setting-off the maximum impact of foreign exchange on the business.
Q: Update us on the kind of response of different states on e-buses and e-public transport vehicles, which was showcased by your company in the past?
A: Discussion on the subject is on with several states and cities like Maharashtra, Gujarat, Karnataka and North India. We have passed in tenders of few of them and have participated in others and its results will be announced in next one or two weeks. In addition, Gurugram has a clearcut plan to go for 500 buses and about 40 per cent of these buses is going to be electric buses.
I think it will bring an interesting and promising future for JBM auto in the electric segment as besides being into the electric bus segment, we are also acting as an electric ecosystem provider. In the system, we are providing a charging solution and the right kind of batteries as our partner is a leading electric manufacturer. In fact, we are looking forward to the localisation of the products so that we can start buying and manufacturing the products in India itself.
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