A household name across generations, Kinetic, celebrated its 50th anniversary on Tuesday with good news for the company and shareholders as the company reported two quarters of consecutive profits.
The company has completed its restructuring with renewed commitment to its mission to consistently provide excellence by working aggressively on all fronts to reduce costs and improve margins.
Speaking on the anniversary, Ajinkya Firodia, MD, Kinetic Engineering Limited (KEL) said, “I am proud to announce that our restructuring and business focus is finally complete. It has been a decade of effort of all our team members that involved debt restructuring, layout changes, quality systems up-gradation, customer hunting, backward integration and finally, turning the tide. It is fortunate and coincidental that it coincides with our 50-year anniversary – and hence is a reward of sorts for our shareholders who continue to believe in us.”
KEL currently produces various kinds of transmission products for cars, buses, trucks, tractors, and other general engineering applications. It also makes complete gearboxes for commercial vehicles and has also devised its own electric axle application. Its customer base includes M&M, TATA, Ashok Leyland, Carraro, Renault Nissan and American axle.
Equipped with large infrastructure and engineering and manufacturing knowledge, the Firodia Group decided to change its business model to auto-systems.
This task was undertaken in 2009 –2010 by then, new entrant, Ajinkya Firodia. After a decade of resilience and persistence, the company this year has turned the corner – by reporting EBITDA, cash and even net profit for two consecutive quarters.
Having invested heavily in various projects such as new machines and set up a dedicated shop for various projects, Kinetic went through many ups and downs in the process and also learned a lot. The company sharpened its focus on transmission products such as gears, shafts, and gearboxes and also went in for backward integration to manufacture their own forgings to reduce its material costs from 78 per cent to 50 per cent. It also has managed to rationalise through efficiency improvements the employee costs from 28 per cent to 16 per cent over the years; and trimmed nearly Rs 140 crore of external debt from its books.