Business Today

Smooth Driving

Zaveri is steering the company through one of the worst recessions to have hit the auto sector
twitter-logo PB Jayakumar   New Delhi     Print Edition: October 6, 2019
Smooth Driving
Harshbeena Sahney Zaveri, Vice Chairman and Managing Director, NRB Bearings \ Photograph by Rachit Goswami

Harshbeena Sahney Zaveri believes in planning for the long term. That is why she is not unduly worried about the immediate future of the company in spite of the fact that the auto sector, its major customer, is in dire straits. "Recession also throws up opportunities and we are ready with the plans if the demand for vehicles does not pick up in the next 10-12 months", she says. NRB, which makes 500-plus types of bearings for vehicles, has seen good growth in the past few years in terms of revenues and profitability.

In 2018/19, NRB reported 12.8 per cent year on year growth, driven by healthy rise in supplies to domestic original equipment manufacturers and exports, which grew 15 per cent and 20 per cent, respectively. Revenues grew from Rs 674.9 crore in 2015/16 to Rs 855.1 crore in 2017/18 and Rs 964.9 crore in 2018/19. Net profit for 2018/19 was Rs 108.2 crore. "We are focused on stronger financials and profits than aggressively increasing sales. Therefore, our financial parameters are well above that of the industry and on a par with international auto ancillary makers," says Harshbeena Zaveri.

Analysts predict tough times ahead, at least for the next couple of years. "With growth moderation expected in 2019/20, we expect revenue, EBITDA and PAT to grow 9.8 per cent, 8.1 per cent and 4.3 per cent CAGR, respectively, between FY19 and FY21," says a recent ICICI Securities report.

Harshbeena is banking on higher exports to make up for the rise in domestic demand. At present, NRB sells about 75 per cent production to domestic vehicle makers. She says NRB's manufacturing facility in Thailand, started a couple of years ago, is going to be a key supplier to the US market as US-China trade relations worsen. In Europe, the company caters to global players such as Daimler, Renault, Volvo and Getrag. "If the recession prolongs, we will look at diversified supplies for railways, industrial solutions and other infrastructure applications," says Zaveri.

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