homeauto NewsBaba Kalyani says defence vertical may dwarf core biz someday. Will Bharat Forge list the unit?
Baba Kalyani says defence vertical may dwarf core biz someday. Will Bharat Forge list the unit?
In an exclusive interview with CNBC-TV18's Shereen Bhan, Baba Kalyani said if defence grows bigger than the core business, "it (defence vertical) would be better off as an independent company."
Baba Kalyani, Chairman and Managing Director of Bharat Forge believes the company's defence business will grow faster than other verticals and could even grow bigger than the core business in the coming years. In an exclusive interview with CNBC-TV18's Shereen Bhan, Kalyani said if that happens, "it (defence vertical) would be better off as an independent company."
Kalyani said this inflection point could come as early as within the next 3-5 years.
The growth in the defence vertical is driven by the synergies between the business and the company's core technologies, such as metal farming, forging, and machining, contributing to its potential expansion.
Amit Kalyani, Deputy MD, Bharat Forge added, “I foresee that each vertical will be a standalone business, whether they get listed or not depends on their size scale and whether their cycles and their businesses require capital, or they require the capital markets to get the reflection of the true valuation.”
Amit Kalyani, also shared insights into the company's approach to acquisitions, highlighting the focus on selective choices in technology domains within India.
According to him, the strategic acquisitions made in the casting business, particularly the acquisition of two foundries with three plants in Coimbatore, have paved the way for accelerated growth. These acquisitions not only offer a head start in expanding their business but also position Bharat Forge favourably in industries with significant opportunities, particularly those witnessing a shift from Europe.
Amit Kalyani said the company prefers acquisitions within India keeping in mind the need to scale up everything from manufacturing capabilities to technology.
"In India, for us to scale up manufacturing, capability, bandwidth, technology, and know-how will be the easiest way for us to kickstart our growth," he said. This strategy aligns with the belief that India is poised to be competitive in various sectors, making it a strategic move for Bharat Forge.
Shares of Bharat Forge settled at ₹ 1,249 on the NSE today, down 1.4%. The stock has gained over 4% in the last month and more than 41% in the past year.
(Edited by : Shweta Mungre)
First Published: Jan 8, 2024 5:40 PM IST
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