StellarSP Seating Products has been a key player in the Indian bus seating industry, known for its innovative designs and commitment to quality. In a recent conversation with N. Balasubramanian, Mr. Rengarajan Srinivasan, Director of StellarSP, shared insights into the company’s performance in FY24, the challenges faced, and the opportunities ahead.
Steady Growth Amidst Challenges
Despite challenging market conditions, StellarSP managed to post an 11% growth in turnover, reaching ₹24.82 crore in FY24. “Through internal process efficiencies and cost control measures, we achieved marginal profitability, despite higher input costs and overheads,” noted Mr. Rengarajan. This performance is commendable, given the pressures on the manufacturing sector, particularly in the bus industry.
StellarSP’s growth was fueled by an expanded customer base, which now includes not only bus OEMs and State Transport Undertakings (STUs) but also new segments like tourism boats and electric three-wheelers. “Securing new business from STUs and OEMs was a significant contributor to our growth,” Mr. Rengarajan highlighted, pointing to the company’s strategic diversification.
Innovative Product Launches and Operational Efficiency
FY24 saw StellarSP launching a comprehensive range of seating products for various bus applications. “Our new products feature proprietary modular designs and improved quality and reliability of critical functional parts,” Mr. Rengarajan explained. This expansion in product offerings has positioned StellarSP as a one-stop solution for bus operators’ seating needs, from traditional buses to the emerging electric vehicle (EV) segment.
To support these new products, StellarSP has implemented small automations in its manufacturing lines, including automated carousel lines for seat assembly. These enhancements have not only improved process quality but also boosted productivity. “Our focus on operational efficiencies, capacity utilization, and faster delivery has helped us capitalize on new business opportunities and drive top-line growth,” Mr. Rengarajan added.
Positive Market Sentiments
Reflecting on the broader industry, Mr. Rengarajan expressed optimism about the future of the Indian bus market. “The bus industry is set to experience significant growth, driven by an increased focus on public transportation and the emergence of new technologies like electric, ethanol, and hydrogen buses,” he stated.
However, he cautioned that while the sector has recovered from the COVID-19 downturn, there are still challenges to be addressed. “Private bus operators and STUs need capital investment support, including flexible credit coverage and lower costs for acquiring new buses,” Mr. Rengarajan observed. He also emphasized the importance of banking sector support, particularly in terms of priority lending and lower interest rates, to help the industry achieve its potential.
Outlook and Strategic Targets
Looking ahead, StellarSP is optimistic about the current financial year, despite a slow start. “The current year began on a positive note, although the order inflow was below projected estimates for the first quarter,” Mr. Rengarajan noted. He anticipates that business will pick up from August/September onwards, with a focus on aligning orders with expanded capacity.
The company is targeting a 20% growth rate for the current fiscal year, driven by innovative, cost-effective products and a commitment to capitalize on opportunities associated with the ‘Make in India, Made in India’ initiatives. “We anticipate achieving a reasonable level of profitability alongside this growth,” Mr. Rengarajan said.
Strategic Expansion and Future Plans
StellarSP is well-positioned to capitalize on the expected growth in the bus industry, particularly with the government’s initiatives to replace state transport buses and promote private partnerships for city bus operations. “Our EV OEM is increasing production, and we have new products in the design and development stages,” Mr. Rengarajan shared.
The company’s facility in Bangalore, with the capacity to deliver up to 30 bus sets per day in a single shift, is strategically located to meet growing demand. “The forthcoming year should bring a series of new opportunities, especially with the release of STU tenders and the expansion of EV OEM operations,” he added.
Exploring New Segments and Opportunities
StellarSP continues to explore new segments within the bus industry and beyond. “We are focusing on developing our business in seating products for buses, including modular seating for EVs and other adjacencies,” Mr. Rengarajan explained. The company is also exploring the supply of ISF parts for various applications and has developed plastic molded seats for city buses and the tourism boat industry.
Looking ahead, StellarSP plans to leverage its core capabilities in PU foaming, steel fabrication, and plastic parts manufacturing to offer end-to-end solutions. “We see potential in contract manufacturing of subsystems and sourcing of parts from customers, as well as in providing design and development services for parts and subsystems,” Mr. Rengarajan concluded.