From BS6 transition to EVs: How Padmini VNA plans its next growth phase

Padmini VNA Mechatronics is looking to accelerate growth through exports, new technologies, and acquisitions, as the automotive component maker seeks to build on three decades of engineering-led expansion and capitalize on global supply chain shifts, Chief Operating Officer Viveka Bhandari told Business Today TV.

Bhandari said the company's founding vision remains unchanged since its inception in 1991: proving that advanced automotive products can be designed, developed, and manufactured in India.

"Padmini was set up on the vision that you can do R&D in India, and you can manufacture in India," Bhandari said, noting that most companies assembled products rather than designing them when the company was founded more than three decades ago.

The company has since grown into a ₹1,400-crore group, with nearly 30% of its workforce engaged in research and development and a portfolio of around 100 patents.

One of the company's defining moments came during the transition from BS-IV to BS-VI emission norms, when nearly 70% of its product portfolio changed.

"Seventy per cent of our product portfolio changed, but we continued to grow," Bhandari said, adding that the company has since recorded nearly 25% annual growth while expanding into clean mobility technologies and export markets.

Technology ownership key to future growth

Randhir Kochhar of EY India said companies with strong technology capabilities and intellectual property ownership are likely to emerge as winners as the automotive industry transitions from internal combustion engines (ICE) to electric vehicles.

"Companies which are able to have ownership of their technologies, their IP, are the ones who are able to pivot, are able to manage the transition, and are able to stay ahead of the curve," Kochhar said.

He argued that while EV adoption is accelerating, conventional vehicles will continue to dominate for several years, making strong ICE cash flows critical for funding future investments. "The bulk of the market continues to be ICE and probably will be ICE for at least the next five to 10 years," he said.

According to Kochhar, technology-led businesses are also better positioned to preserve margins and command premium valuations compared with traditional build-to-print manufacturers.

Betting on clean mobility and connected vehicles

Bhandari said Padmini's future strategy is centered around two themes: clean mobility and smart, connected vehicles.

"The way Padmini is approaching it is that ICE space remains our cash cow. And that is now being used to fund our R&D in EV specifically," she said.

The company is investing in thermal management solutions for electric vehicles, plug-in hybrids, and soft hybrids while simultaneously building capabilities in electronics and software.

Over the years, Padmini has evolved from a mechanical engineering-focused company to a mechatronics player and is now strengthening its electronics and software expertise.

"It's about really having that end-to-end capability with your team where you're still able to deliver to the ICE cash cow, and you're able to develop the future," Bhandari said.

Export push amid China Plus One shift

Bhandari said the global effort by manufacturers to diversify supply chains away from China presents a significant opportunity for Indian companies.

"Global OEMs are wanting to de-risk their supply chains, that provides a very unique opportunity for a company like Padmini," she said.

Unlike many suppliers that manufacture designs provided by customers, Padmini increasingly develops its own products and designs for global original equipment manufacturers.

"Padmini has actually been allowed by many of the global OEMs to provide their own design," she said.

The company is also evaluating opportunities emerging from industrial restructuring in Europe, where some manufacturers are struggling or shutting operations.

"We are really exploring this year" whether products currently supplied by European competitors can be manufactured in India at comparable quality and lower costs, Bhandari said.

New technologies, markets and acquisitions

Looking ahead, Bhandari said the company intends to pursue growth on multiple fronts rather than relying on a single strategy.

"So, new technologies, new markets, and also moving up that value chain with our customers," she said.

The company is seeking to transition from being a component supplier to a broader systems provider, reflecting a growing trend among automakers to involve suppliers earlier in the product development cycle.

Customers increasingly view suppliers as development partners rather than simply component manufacturers, she said.

While Padmini has traditionally grown organically, acquisitions are also being considered as part of its next phase of expansion.

"I'm definitely looking at how can we accelerate that growth through acquisitions in the future," Bhandari said.

Founded in 1991, Padmini VNA focuses on the development and manufacturing of automotive technologies and components, serving both domestic and global markets.