How this gasket manufacturing, forging company caters to clients like Ashok Leyland, Jaguar, TATA Motors, and BMW to rake Rs 688 Cr turnover

Several decades ago, even before partition, Late WN Talwar, along with his brothers, owned the dealership of Studebaker cars in Peshawar (now in Pakistan). Post-independence in 1947, they decided to shift base, and moved to India to begin their journey from scratch.

With experience in the automobile industry, Talwar decided to start an auto components business, and set up a gasket manufacturing company in 1956 in collaboration with UK-based Coopers Payen. He founded Talbros Automotives Components Ltd to cater to the automobile sector, and set up the first manufacturing unit in Faridabad, Haryana.

At that time, little did he know that over a period of six decades, Talbros would become one of the leading suppliers of automobile parts in India, raking in Rs 688 crore in group turnover, and eminent clients like TATA Motors, Jaguar, Mahindra & Mahindra, Ashok Leyland, General Motors, Honda, and Hyundai among many others.

In an interaction with SMBStory, Anuj Talwar, Joint Managing Director and third-generation entrepreneur, narrates how the company diversified from gasket manufacturing to forging, became public listed, overcame challenges and competition to reach where they are now. 

Edited excerpts from the interview with Anuj Talwar.

SMBStory: How is Talbros catering to the automobile industry?

AT: Talbros is a diversified auto component player with presence across automobile categories in two-wheelers, passenger vehicles, commercial vehicles and farm equipment. We started with the gasket manufacturing business but then expanded to forging business in 2007.

Our business is broadly divided into a standalone business, which is the gasket and forging business, and three joint ventures with global auto component leaders for gasket, suspension, chassis, and anti-vibration components and hoses. In our standalone gasket business, we are one of the market leaders and continue to hold a healthy market share domestically. Our 40:60 joint venture with Nippon Leakless group supplies to leading OE vehicle and motorcycle manufacturers, such as Honda, Suzuki, and Yamaha Worldwide.

Forging business is an outlier for our overall business performance. As a one-stop solution, we are capable of serving the automotive, agriculture, defence, marine and off-highway vehicle sector.

Through our joint venture Magnetti Marelli Talbros Chassis systems, our 50:50 JV has enabled Talbros to develop and manufacture chassis components including, control arm, suspension links steering knuckle, front cross member, rear twist-beam axle, wheel group and semi corner module assemblies for automotive application. The JV has also established processes for aluminium stamping and welding, and supplying to premium car segments. Talbros Marugo Rubber, our smallest company, is a joint venture with Marugo Rubber Industries of Japan, which caters to rubber components and hoses. The scope to grow is immense in both these joint ventures. 

The evolution of the company continues with a strong order book with existing partners and adding new OEMs to the kitty whilst increasing the share of export business aggressively over the past three years.

In 2020, our company received aggregate orders worth $ 31 million (Rs 234 cr), including orders received in JV and subsidiary companies catering to domestic and international markets.

The same year, we also entered into a Technical Assistance Agreement (TAA) with our Japanese partner, ‘Sanwa Packing Industry Co. Ltd.’ for lightweight aluminium heat shields.

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SMBS: What is your channel business strategy, and when did you raise IPO?

AT: We sell directly to OEMs (Original Equipment Manufacturer). Our OEMs are large domestic manufacturers as well as international OEMs based in Europe and the USA. In 1980, the company made its maiden public issue and follow-on offering was done in 2005.

While our symbiotic relationship with our global partners has kept us abreast with innovations within the field, our long and fruitful association with them bears witness to the trust and solidarity that Talbros’ name is synonymous with.

Our Research and Development centres showcase our design capabilities, including endurance, static and simulated environment testing. Today, our manufacturing prowess spans over five business and 10 facilities located across India, where most of the raw materials are sourced locally except for rubber and a few chemicals that are imported from Japan and Vietnam. 

The largest OEMs like Ashok Leyland, Bajaj Auto, Cummins Group, Eicher India, Escorts Group, Force Motors, General Motors, Hero Honda, Honda, Hyundai, John Deere, Mahindra & Mahindra, Maruti Suzuki, Suzuki, TAFE, Tata Motors, Tata Cummins, Simpsons, Jaguar Land Rover, and BMW and international corporates like Carraro, DANA, KMP Brand, Maxi Force, GKN Driveline are our proud customers.

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SMBS: What is the market size of your sector, and how are you differentiating from the competition?

AT: Auto component industry is worth multi-billion all over the world and Talbros is one of the hedged auto component players in India among Ramakrishna Forgings, Banco Products, Munjal Showa, and Jamna Auto with consistent dividend pay-out over 50 years.

According to an IBEF report, the industry registered a CAGR of 6 percent, reaching $49.3 billion in FY20, with exports growing at a CAGR of 7.6 percent during FY16-FY20 to reach US$ 14.5 billion in FY20. 

Our well-diversified portfolio with international technology tie-ups, helps us provide best in class products to our customers and makes us stand unique amongst our peers.

In our standalone gasket business, we continue to hold a 50 percent market share domestically. Our forging business has a market share of 50 percent in exports. This is an achievement, and we are very proud that almost half of the revenue is exported throughout the world. 

We are also now moving to heavy value machine components that will improve our margin trajectory. We are a one-stop forging and machining house for 750 tonnes to 2500 tonnes. 

Our strategy to gain market share domestically, and to keep knocking on the doors of global OEMs is paying us dividends. The growth that we saw in Q2, I am very hopeful that the momentum continues in Q3 and Q4 because the commercial vehicles are yet to pick up speed.

SMBS: What are your future prospects?

AT: We had visited OEMs all over the world just before lockdown, and we are seeing the results of that now. Many of those OEMs have since visited our factories virtually during the lockdown, and this has helped us successfully book orders.

We are constantly working on increasing our export percentage to our topline, and it is moving in the right direction.

Our focus towards growing at the export market is showing results. Over the last few years, we have made a lot of efforts towards product development and testing with global auto majors. 

Our exports now cater to USA, UK, Europe, and Japan. Make in India is opening doors for companies like Talbros to bring in business opportunities from foreign players. Also, this whole issue between India, China, and the USA will give India a huge opportunity in every space to export. These new orders are a huge validation of our technical capabilities and open the door to many large customers for us. Also, as Tesla is making inroads in India, we are in talks. I hope to crack a deal in the near future.