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    This auto parts maker in Bengaluru expects a "big spike" in business, thanks to a Norway acquisition

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    This auto parts maker in Bengaluru expects a "big spike" in business, thanks to a Norway acquisition

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    Speaking to CNBC-TV18, K Ajith Kumar Rai, Founder and Chairman at Suprajit Engineering said that the company will outperform the industry by 10 percent.

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    Bengaluru-based Suprajit Engineering's founder and chairman, Ajith Rai, is pretty confident that the growth this year, and for the next two, will be pretty strong. And, bulk of the growth may come from the Norwegian light duty cable business, which was acquired in April this year.
    How strong? “This year we will have a big spike in our growth thanks to the acquisition of light duty cable (LDC), which will add another nearly Rs 700-800 crore of business to us in this financial year," K Ajith Kumar Rai, Founder and Chairman of the auto parts maker, told CNBC-TV18. The company's entire revenue last year was Rs 1,840 crore.
    Not just more revenue, Rai is hoping for better profit margin too; even without the business from the Norway subsidiary. “If you take without LDC, we are still at about 13- 13.50 percent margin, our guidance has been 14 to 15 percent. So, we are very much there in terms of without LDC.”
    The continued slowdown in sale of automobiles, partly due to the global shortage of semiconductor chips, has affected the performance of the companies like Suprajit Engineering, which make the parts that go into these vehicles. Despite a nearly 3% rally in the stock in the last one month, it is still down over 25% this year so far.
     
    But the future looks better. Not just to the management, but to the analysts at Emkay Global as well. The broking firm has initiated coverage on the stock with a ‘buy’ call. They forecast a compounded annual growth of 25 percent in revenue between March 2022 and March 2025.
    According to Rai, the company's growth will beat that of its peers by 10%. "I think which is easily doable for this year,” he added. Rai hopes for good volume growth in the US market and tepid one in Europe.
    For full interview, watch accompanying video
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