Auto ancillary major, Sundaram Fasteners Ltd. (SFL), has bagged export orders from the competitive Japanese market. This was reported by a leading financial daily.
Sundaram Fasteners (TVS Group) is India's largest manufacturer and exporter of high-tensile fasteners (50%+ domestic market share). Its product range also includes automotive components, cold formed/extruded products (Nuemeyer, Germany) precision formed gears and radiator caps. It is the sole supplier of radiator caps to General Motors (GM) USA. It has been awarded the 'Best Vendor' by GM for three years in succession.
SFL has made a breakthrough in the competitive Japanese market after sustained efforts over four years. It has secured an order from Japanese engineering giant, Komatsu, for track-shoe bolts and nuts. One can gauge SFL's rigid quality standards from the fact that it has begun exporting to Japan, where competition is cut-throat, with all companies offering quality products at competitive rates.
SFL has identified exports as a major thrust area for the future. Exports are expected to garner 40% of total revenues in the next five years. (Currently exports account for 16% of turnover. The company's already sells its products to global auto majors, GM and Daimler-Chrysler, and also engineering major Cummins of USA.
Given its reputation for quality and adherence to tight delivery schedules, more auto majors can be expected to choose SFL as their ancillary supplier. With a slew of launches planned in the domestic car segment, SFL may witness significant growth in revenues. If auto MNCs in the country (Honda, Toyota) are impressed with SFL's products, these company may well pick SFL to supply to their global markets. This will enable the company to achieve its ambitious export target (40% of total revenues).
Analysts have flagged a 'BUY' on the stock largely due to the company's ability to bag orders based on the quality of its products, which has resulted in associations with auto giants like GM and Daimler-Chrysler.
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