LIVE: Bharat Forge Growth Strategy: Baba Kalyani & Amit Kalyani Discuss Defence Business | Exclusive

Summary

In this insightful conversation, Mr. Kalani reflects on his 75-year journey leading Bhat Forge, emphasizing the company's transformation into a technology-driven powerhouse. He discusses pivotal moments in the company's evolution, including its foray into defense, aerospace, and e-mobility sectors. With a strong focus on innovation and R&D, Mr. Kalani highlights the company’s ambition to become a global leader. He also shares his deep nationalistic values, instilled by his military education, and his ongoing commitment to mentoring the next generation. His son, Amit, is positioned to continue the legacy, driving the company’s growth in the coming years.

Takeaways

• 😀 Bhat Forge's transformation began in 1989-1990 with the installation of an automated press forging system, marking a shift from manual labor to advanced technology.
• 😀 The company's key inflection point came with India's economic liberalization, allowing Bhat Forge to expand globally in the defense sector.
• 😀 Bhat Forge manufactures some of the most advanced artillery systems and armored vehicles in the world, with increasing exports.
• 😀 The company’s defense division has become a critical business, with aspirations to develop new technologies in unmanned systems and infantry combat vehicles.
• 😀 Bhat Forge is expanding its operations into five verticals: Defense, Aerospace, Industrial, E-Mobility, and Mobility, focusing on high-tech products and services.
• 😀 The company has invested heavily in R&D, particularly in AI, embedded systems, and metal forging, to stay at the forefront of technology in defense and e-mobility.
• 😀 Despite fierce competition, Bhat Forge is making strides in the e-mobility space, focusing on high-voltage components for electric vehicles and integrating intelligent systems.
• 😀 Strategic acquisitions have played a significant role in Bhat Forge’s expansion, especially in enhancing its casting and foundry capabilities.
• 😀 Baba Kalani’s leadership is rooted in discipline and military values, instilled during his time at the National Military School, shaping Bhat Forge’s corporate culture.
• 😀 The company’s future focus is on expanding global partnerships, particularly in defense, while also growing its domestic manufacturing base as India’s private sector plays a larger role in defense.
• 😀 Both Baba and Amit Kalani see India’s manufacturing sector as poised for growth, with Bhat Forge positioned to take advantage of national initiatives like Make in India.

Q & A

What significant technological advancement did Bhat Forge undertake in the 1990s?

In the 1990s, Bhat Forge made a significant technological leap by investing in an automated press forging system. This marked a shift from manual labor to advanced automation, which greatly improved efficiency and product quality.

How did Bhat Forge adapt to the changes brought by India's liberalization in the 1990s?

The liberalization of India in the 1990s allowed Bhat Forge to expand and invest in new technologies. This enabled the company to grow its business, particularly in the defense sector, and establish itself as a leading manufacturer in various industries.

What are the five key growth engines for Bhat Forge?

The five key growth engines for Bhat Forge are Defense, Industrial, Aerospace, E-mobility, and Technology-driven Expansion. These areas drive the company's growth and diversification, each contributing to its global presence and revenue.

How has Bhat Forge contributed to India's defense capabilities?

Bhat Forge has made significant contributions to India's defense sector, developing and manufacturing artillery guns, armored vehicles, and ammunition. The company is also focused on expanding into unmanned systems and is committed to achieving self-reliance in defense manufacturing.

What role does research and development play in Bhat Forge's business strategy?

R&D is crucial to Bhat Forge's strategy, especially in defense and technology. The company invests heavily in R&D to create proprietary technologies that provide it with a competitive advantage, particularly in sectors like defense, aerospace, and e-mobility.

How does Bhat Forge plan to expand its global presence?

Bhat Forge plans to expand its global presence by focusing on direct sales to OEMs (Original Equipment Manufacturers) like Mercedes-Benz and Audi, rather than relying on aftermarket sales. Additionally, the company has made strategic acquisitions to enhance its manufacturing capabilities.

What is Bhat Forge's perspective on India's manufacturing future?

Bhat Forge is optimistic about India's manufacturing future, especially with initiatives like 'Make in India.' The company sees significant growth potential in the sector and aims to expand alongside India's projected $30 trillion GDP.

What values did Baba Kalani inherit from his military school background?

Baba Kalani inherited discipline, national pride, and a strong work ethic from his military school background. These values have guided his leadership and helped shape the company's culture, particularly in terms of punctuality, commitment, and a focus on quality.

How does Bhat Forge handle leadership succession?

Leadership succession at Bhat Forge is handled by ensuring that the younger generation, like Amit Kalani, inherits the values and passion of the founder, Baba Kalani. While Baba is not planning to step back immediately, he emphasizes the importance of mentoring the next generation to lead the company forward.

What challenges does Bhat Forge face in the electric vehicle (EV) sector?

Bhat Forge faces challenges in scaling up its EV production due to the current market's relatively low volumes. However, the company remains optimistic about the future of the EV sector, anticipating significant growth as the market expands.