### **OVERVIEW** Menon Bearings Limited (MBL), headquartered in Kolhapur, Maharashtra, is a market-leading Indian manufacturer of high-precision, niche engineering components. Established in 1994, the company has evolved from a specialist in engine bearings to a diversified, high-tech capital goods player with global OEM clientele. MBL operates through three core divisions—**Bimetal Bearings, Alkop (Aluminum Die Casting), and Brakes**—serving automotive, off-highway, oil & gas, defence, railways, and e-mobility sectors. With a fully integrated manufacturing base across five plants (27 acres in Kolhapur), a U.S. office in Indianapolis, and operations in a four-player oligopoly, Menon maintains strong competitive positioning. The company is known for **zero PPM (defects per million), deep in-house engineering capabilities, and long-term customer partnerships** with marquee clients including John Deere, Cummins, Eaton, Honeywell, Allison, and Porsche. --- ### **KEY BUSINESS HIGHLIGHTS (NOV 2025)** #### **1. Revenue & Growth Outlook** - **Consolidated revenue target of ₹280–290 crores** by end of FY26, supported by secured orders and capacity expansion. - **18–20% year-on-year consolidated revenue growth** expected in FY27. - **Standalone revenue forecast** of ~15% CAGR over three years, with consolidated growth of ~25% over two years. - **Brakes division** projected to grow up to **75% over three years**, once delayed railway and dynamometer projects materialize. #### **2. Major Contracts & Orders** - **Allison (USA):** Secured contract generating **INR 2.5 crores/month** from the Bi-Metal division (Thrust Washers), with **INR 30 crores annual volume** anticipated. - Additional **Allison orders worth INR 3 crores/month** expected to enter production by **Jan 2026**. - Commercial production of **51 validated parts** for **John Deere and other global customers** scheduled to begin by **Q4 FY26**. #### **3. Entry into EV & E-Mobility** - Entered EV supply chain by supplying components via **Eaton (Ireland)** to **Porsche E-mobility**, with plans to generate **8–10% of Alkop’s revenue from EVs by FY27**. - Supplies **Tesla** through **Concentric** and **Tata Curvv/Punch** via **TACO Prestolite**. - Menon has developed **four electric vehicle parts for Porsche** after a three-year development cycle; production underway. - Developing **thin-walled aluminum casting technology** for EV applications in collaboration with Porsche and Tata. - **Menon New Ventures** exploring opportunities in **EV charging infrastructure**, cold chain, and other emerging tech areas. #### **4. Export Growth & International Expansion** - **Exports:** ~30% of revenue (FY25), rising to **35% by FY26**, and **40% by FY27**. - Key export markets: **USA, Brazil, Japan, Mexico, Europe, Middle East, Africa**. - Secured **initial INR 50 lakh/month export order from African customers** for Bi-Metal products, with cautious scaling planned due to historical bad debt experiences (INR 30–40 lakh in 1990s). - **Brake segment:** Signed merchant export deal for **HCV/LCV drum brake pads**, generating **INR 50 lakh/month** in African aftermarket. - Plans to expand in **Africa via large distributor network**, leveraging Dubai-based indirect access to West and East Africa. #### **5. Diversification into Brakes** - Launched **brake pads for Bajaj Pulsar 2-wheelers**, entering the **2W OE segment** and expanding beyond HCV/LCV. - Secured new volume equivalent to **INR 80–85 lakhs/month** due to performance issues with prior supplier. - Invested **₹3 crores in dynamometer testing facility** (8-month gestation), critical for **OEM and safety-critical certification**. - Targeting ₹12% EBITDA in Brakes (vs. 22% in Bearings, 21% in Alkop). - Regulatory registration with **Indian Railways underway**, though delayed by technical challenges—management pursuing alternative interim growth levers. #### **6. Capacity & Capex Expansion** - **Bimetal Division:** Increased thrust washer capacity by **7 lakh units/month**; total annual capacity now **528 lakh units**. - **Alkop (Menon Alkop Ltd - MAL):** - Capacity to **double from 1,440 to 2,880 MTPA** by FY27 via **₹10 crore capex**. - Projected to grow from **₹40 crore (FY25) to ₹120 crore (FY27)**. - **Brakes Division:** Expanding capacity from **18 lakh to 24 lakh units/year** through **₹5 crore investment**. - Major capex of **₹30–40 crore in FY25**, including: - ₹19.55 crore in Bimetal, - ₹12.50 crore in Alkop, - ₹13.24 crore ongoing in Alkop. - **New facility Unit III** for lead-free and eco-friendly components inaugurated (Apr’24), with **commercial production of thrust washers** now live. #### **7. In-House & Technological Capabilities** - **In-house design and manufacturing** of **special-purpose machines (SPMs), tooling, gauges, and fixtures** using SolidWorks & AutoCAD. - Own **tool room** with precision machinery (turning, grinding, centerless) for accelerated R&D and first-time-right prototypes. - **In-house powder production, tooling, and machine building** reduce costs and provide a sustainable competitive edge. - Proprietary processes include **sintering, cold cladding, and heat-treated aluminum alloy technology**. #### **8. Brand, Distribution & Aftermarket Strength** - **Pan-India aftermarket network:** - 1,000 **dealers & distributors**, - 10,000+ **retail outlets**, - 40 **marketing executives** trained to support **30,000+ mechanics and reborers**. - 20+ years of established **mechanic field relationships**, reducing marketing costs for new product launches (e.g., brake linings). - Strong brand equity enables quick market penetration into safety-critical and high-turnover segments. #### **9. Market Size & Competitive Positioning** - Domestic markets: - Engine Bearings: **₹1,000 crores/year** - Brake Components: **₹2,000 crores/year** - Aluminum Castings: **₹6,000 crores/year** - **Market leader** in engine bearings; **only Indian company** in engine bearing segment. - Operates in **four-player domestic oligopoly**; competes globally with **Federal Mogul, KSPG**. - Supplies over **50 OEMs**, maintains **Tier-1** status, and is a **Tier A-rated vendor** based on quality, delivery, and PPM. #### **10. Innovation & Strategic Positioning** - One of few Indian companies capable of producing **next-generation lead-free, BS-VI/Euro-VI compliant** materials. - Focus on **high-value, high-precision, niche products** with margins above industry average. - Realization of **~₹750/kg on aluminum components** (vs market avg. ₹200–550), indicating deep value addition. - Benefits from **"China Plus One"** and **"Europe Plus One"** trends, with **₹150 crores of export RFQs** received as of Nov’24. --- ### **FINANCIAL & OPERATIONAL SNAPSHOT** | Parameter | Details | |--------|--------| | **Revenue (FY23)** | ₹216.9 crores (11% y-o-y growth) | | **Revenue Mix (FY23)** | Bimetal: 73%, Alkop: 27% | | **Exports (FY23)** | ~30–34% of revenue; expected to reach **40% by FY27** | | **OEM vs Aftermarket** | Serves both; brakes have strong aftermarket potential (replacement every 40,000 km) | | **Customer Concentration** | **No single customer >10–12%**, ensuring resilience | | **EBITDA Margins** | Bearings: **22%**, Alkop: **21%**, Brakes: **target 12%** | | **Production Capacity (FY25)** | Bimetal: 486 lakh units; Alkop: 1,440 MTPA | | **Utilization (FY23)** | ~70% | --- ### **STRATEGIC PILLARS (2025–2027)** 1. **Export-led Growth:** Target **Africa, U.S., and Europe** with merchant exports and distributor-led expansion. 2. **EV & E-Mobility Entry:** Expand Alkop's EV footprint via **Porsche, Tesla, Tata**, and global Tier-1 suppliers. 3. **Brake Segment Ramp-up:** Leverage dynamometer capability and Indian Railways registration for OEM growth. 4. **Capacity Scaling:** Invest ₹30+ crore in infrastructure to support **Allison, John Deere, and Bajaj** orders. 5. **Diversification & Innovation:** Via **Menon New Ventures** into EV charging, cold chain, and high-growth tech spaces. 6. **Sustainability:** 1.25 MW **rooftop solar** installation planned; lead-free, asbestos-free, and eco-antifriction technologies.