Davos WEF 2022 | Bharat Forge Has A Capital-Lean Strategy For New Verticals, Says Amit Kalyani

Bharat Forge Ltd. is betting on an capital-lean strategy to build and strengthen new verticals like clean energy and electric mobility, according to Amit Kalyani.

The company is getting into electric vehicles and renewables, including hydrogen, deputy managing director at Bharat Forge, told BQ Prime's Menaka Doshi on the sidelines of the World Economic Forum summit at Davos on Monday.

However, the company is entering these new businesses "without making any large investments" until it "gets to scale," Kalyani said. The company is currently using its existing manufacturing capabilities and is "gaining knowledge" as it develops prototype components with its clients.

“We have created a prototype and incubation centre. Even the customer is in a prototyping stage right now," he said. "We are making prototypes with them."

The company would grow as the world moves to create renewable sources of energy, spurring demand for capital goods, he said. The forging company will target acquisitions and create partnerships in the renewables sector and aims to transform itself from a supplier of components to subsystems.

But that's not the only focus. Bharat Forge has divided itself into five business verticals: conventional automotive, industrial, defence, light-weighting and EV, and aerospace.

“This allows us to have five times the amount of brainpower," Kalyani said. "It isn’t a monolithic company anymore. We have now created a strategy to grow each one [vertical] substantially by 2026. We have set ambitious goals. We are going to supercharge our growth.”

The aim, according to Kalyani, is to become a "mainstream company". "We are not just a forging company, we have become industrials company."

Bharat Forge is actively incorporating global ESG norms in its business strategies and aims to increase use of renewable energy, Kalyani said.

"Every business will be using more and more renewable energy. Today we use on an aggregate 26-27% energy, by 2026 we will cross 50% and by 2030 we will be substantially above 75%," Kalyani said, adding that the company is also focused on reducing net water and net waste.

Watch the full conversation here: