Divgi TorqTransfer Systems Ltd. Company Profile

Background

Divgi TorqTransfer Systems Ltd. (Divgi-TTS) is a prominent Indian automotive component manufacturer specializing in advanced drivetrain solutions. Established in 1964 as Divgi Metalwares Private Limited, the company has evolved into a leading provider of transfer case systems, torque couplers, dual-clutch transmissions (DCTs), and transmission systems for electric vehicles (EVs). Divgi-TTS is recognized for its commitment to innovation, quality, and long-term partnerships with both domestic and international original equipment manufacturers (OEMs).

Key Strategic Focus

Divgi-TTS's strategic objectives include:

• Expansion into EV Market: Developing and supplying transmission systems tailored for electric vehicles, aligning with the global shift towards electrification.

• Automatic Transmission Solutions: Introducing domestically manufactured DCT systems to meet the growing demand for automatic transmissions in passenger and utility vehicles.

• Diversification and Global Reach: Enhancing market share by expanding customer base and geographic presence, reducing dependency on specific markets.

• Cost Optimization: Implementing product engineering and localization strategies to improve cost efficiency.

• Research and Development: Investing in R&D to innovate and expand product offerings, addressing emerging automotive trends.

Financials and Funding

In March 2023, Divgi-TTS launched its Initial Public Offering (IPO), raising approximately ₹412.12 crore. The IPO comprised a fresh issue of ₹180 crore and an offer for sale of up to 39.34 lakh shares. Proceeds from the fresh issue were allocated towards capital expenditure for purchasing equipment and machinery to enhance manufacturing capabilities, particularly for EV transmissions and DCT systems.

For the fiscal year ending March 31, 2024, the company reported:

• Revenue from Operations: ₹2,534.24 crore

• Profit Before Tax: ₹535.32 crore

• Profit for the Year: ₹397.35 crore

These figures reflect Divgi-TTS's consistent financial performance and growth trajectory.

Pipeline Development

Divgi-TTS is actively developing several key products:

• EV Transmission Systems: The company has been awarded contracts to supply EV transmission systems to leading EV manufacturers in India, with commercialization expected in the near future.

• Dual-Clutch Transmission (DCT) Systems: Plans are underway to launch domestically manufactured DCT systems, positioning Divgi-TTS as the sole manufacturer of DCTs in India.

• Rear-Wheel Drive Manual Transmissions: Development efforts are focused on enhancing the performance and efficiency of manual transmissions for rear-wheel-drive vehicles.

Technological Platform and Innovation

Divgi-TTS distinguishes itself through its technological capabilities:

• Proprietary Technologies: The company has developed in-house software for system-level solutions, including electronically controlled transfer cases and torque couplers.

• Scientific Methodologies: Utilization of advanced gear manufacturing processes, such as gear teeth honing and superfinishing, ensures high precision and quality.

• AI-Driven Capabilities: Integration of software development with hardware design enables the creation of intelligent drivetrain systems that enhance vehicle dynamics and performance.

Leadership Team

Divgi-TTS's leadership comprises experienced professionals:

• Mr. Jitendra Bhaskar Divgi: Managing Director, with extensive experience in drivetrain systems and strategic business development.

• Mr. Hirendra Bhaskar Divgi: Whole-Time Director, overseeing operations and manufacturing excellence.

• Mr. Sanjay Bhalchandra Divgi: Non-Executive, Non-Independent Director, contributing to corporate governance and strategic planning.

• Mr. Bharat Bhalchandra Divgi: Non-Executive, Non-Independent Director, focusing on financial oversight and stakeholder relations.

The board also includes independent directors with diverse expertise in business operations, finance, and corporate governance.

Competitor Profile

Market Insights and Dynamics:

The global automotive drivetrain market is experiencing significant growth, driven by increasing demand for fuel-efficient vehicles and advancements in transmission technologies. The shift towards electric vehicles further amplifies the need for innovative transmission solutions.

Competitor Analysis:

Divgi-TTS faces competition from both domestic and international players:

• BorgWarner Inc.: A global leader in drivetrain solutions, offering a wide range of products including transfer cases and DCTs.

• Magna International Inc.: Provides comprehensive powertrain solutions with a focus on innovation and sustainability.

• ZF Friedrichshafen AG: Specializes in transmission systems and has a strong presence in the EV segment.

Divgi-TTS's focus on localized manufacturing and tailored solutions positions it competitively within the market.

Strategic Collaborations and Partnerships

Divgi-TTS has established long-term relationships with several marquee clients:

• Mahindra & Mahindra: A key domestic OEM with collaborations spanning over two decades.

• Tata Motors: Partnerships in developing and supplying advanced drivetrain components.

• BorgWarner: Historical joint ventures and ongoing collaborations in transmission technologies.

These partnerships underscore Divgi-TTS's commitment to delivering high-quality, customized solutions to leading automotive manufacturers.

Operational Insights

Divgi-TTS operates three manufacturing facilities:

• Sirsi, Karnataka: Focuses on transmission, transfer case, and synchronizer components.

• Shivare, Maharashtra: Equipped with advanced grinding and superfinishing equipment for high-precision components.

• Bhosari, Maharashtra: Serves as the assembly, lab testing, and packing unit, strategically located near key clients and export ports.

An additional facility in Shirwal, Maharashtra, is under construction to expand manufacturing capacity, particularly for DCT and EV transmissions.

Strategic Opportunities and Future Directions

Divgi-TTS is poised to capitalize on several strategic opportunities:

• EV Market Penetration: Leveraging expertise in transmission systems to become a preferred supplier for EV manufacturers.

• Automatic Transmission Demand: Meeting the increasing demand for automatic transmissions in utility vehicles through localized DCT production.

• Global Expansion: Diversifying geographic presence to mitigate risks associated with market concentration.

• Innovation and R&D: Continuing investment in research and development to stay ahead of technological advancements and market trends.

Contact Information

• Website: Divgi TorqTransfer Systems Ltd.

• LinkedIn: Divgi TorqTransfer Systems Ltd.

• Twitter: Divgi TorqTransfer Systems Ltd.

• Facebook: Divgi TorqTransfer Systems Ltd.

Divgi-TTS's commitment to innovation, quality, and strategic growth positions it as a key player in the evolving automotive drivetrain industry.