Rane Holdings
Rane Holdings is a holding company managing investments across automotive and industrial components businesses; Rane Group supplies safety-critical automotive components.
- Public company
- Chennai, TN, INIndia
Rane Holdings is a holding company managing investments across automotive and industrial components businesses; Rane Group supplies safety-critical automotive components.
What could change its growth trajectory, and what would confirm it?
Electrification threatens only a small part of Rane Holdings' sales: about 93% of sales came from EV-agnostic technologies, while engine valves, roughly 7% of total sales, were the product directly under threat. Global customers were seeking a second source after China, an opening India was positioned to fill.
Exports were about 22% of total revenue, with a target above 25% within three years. The company expected 12% to 15% compound annual growth. Capital expenditure was planned at about INR 250 crore to INR 300 crore.
Which risks could break the thesis, and what would warn of them?
The risks that matter most for Rane Holdings are cyclical demand in segments such as commercial vehicles, which can fall for a year or two, and the engine-valve line, about 7% of total sales, that is directly under threat.
Rane Holdings' competitiveness may not transfer to a manufacturing location outside India. India's scale was much smaller than China's, so it could not replace China as a source. Recent growth was partly commodity inflation pass-through, so real growth was lower than reported.
What does the product do for its buyer, and how is it delivered?
Rane Holdings supplies safety-critical vehicle systems to original equipment manufacturers and Tier 1 suppliers. Rane (Madras) Limited runs five businesses: steering and linkage, light metal castings, brake components, engine components and aftermarket products. ZF Rane Automotive designs and manufactures complete hydraulic power steering systems for a wide spectrum of vehicles, and Rane Steering Systems manufactures manual and electric power steering columns for commercial and passenger vehicles.
The group's portfolio spans steering and suspension systems, brake components, engine components, occupant safety systems and light metal castings. Forging, casting, machining, assembly and testing are handled in house.