Second innings for Premier
Premier Ltd, the makers of Premier Padmini cars which once ruled the Indian roads, is gearing up for a second innings. Manu P Toms reports.business Updated: Nov 25, 2011 20:49 IST
Premier Ltd, the makers of Premier Padmini cars which once ruled the Indian roads, is gearing up for a second innings. The company is diversifying and expanding into machining and heavy engineering business and is re-entering the auto business after a gap of a decade.
Maitreya Doshi, chairman and managing director, Premier Ltd, dreams of rebuilding the group into a Rs 2,500-crore turnover company in the next six years.
Premier formed joint-ventures (JVs) with European majors Peugeot and Fiat in 1991. The JVs collapsed and partners got out of the mess when labour issues hurt the business.
After a painful period of tax litigations and indebtedness, Premier sold its 36-acre Kurla property to Manohar Joshi-owned real estate company Kohinoor Planet for Rs 120 crore in 2005.
“Our second innings began there,” said Doshi. He used this money, along with R250 crore debt and fresh equity infusion, to expand and modernise his Pune plant.
The 52,000 sq ft plant in 27 acres with 2,000 workers now makes computer numerical control (CNC) tooling machines, mainly gear-making machines and heavy machine blocks, for automotive and heavy engineering biggies such as Tata, Mahindra, Eaton, L&T and BHEL.
“We invested Rs 300 crore in the past four years. Now we hold 70% market share in this business,” said Doshi.
Three years back Premier entered heavy engineering business, making generator parts for windmill and infrastructure players. Premier makes chassis frame for BEML’s metro train coaches and large cylinder blocks for Cummins.
Growing at the rate of 30%, Premier’s revenue this fiscal is poised to cross Rs 300 crore.
With promising new businesses, Doshi expects the annual turnover to reach Rs 500 crore in 3 years, which will be Rs 1,000 crore in six years.
Doshi hopes the auto business — the assembly and sale of China-based Zoyte’s compact SUV Rio — will fetch anotherRs 1500 crore by 2017 when more models join and volume touches 18,000 units.