Pennar Industries downsizes biz units for focused growth
The company’s strategic shift towards fewer business units, including acquisitions and divestments, is expected to affect its current employee base of 10,000
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City-based Pennar Industries Limited, a diversified-engineering company on Monday said it has taken up an approach of downsizing or prioritising business verticals to grow further in a focused way. From the past two quarters, the Rs 3,000 crore worth Group has merged internally its business verticals to nine from 16, of which the company now has its focus on five profitable verticals. Pennar Industries has exited from few businesses and is in the process of shutting down others.
Established in 1988, Hyderabad’s own startup now stands at a topline of Rs 2,928 crore. The company started manufacturing operations (PEB) in the US under Ascent Buildings in 2021, engineering service office in Germany in 2021 and acquired aerospace company Cadnum in France for manufacturing aerospace components.
RVS Ramakrishna, Chairman, Pennar Industries Ltd, said: “We would now like to focus on fewer businesses and put more effort into these which has large addressable global market and that has given the Company growth over the last few years. We have already started seeing its benefits now in terms of management bandwidth, resources, funds etc. Our domestic business share is 60 per cent, while international business is 40 per cent, wherein US contributes 35 per cent and the rest comes from Europe.”
Pennar Industries has its focus on PEB India/Ascent, Tubes, Hydraulics, Engineering Services, Process and Heating Equipment, all of which has a potential addressable market of Rs 7,500 crore to Rs 43,000 crore by 2028. The company has exited from Solar MMS, Retail (B2C), Commodity Steel and is in the process of divesting other verticals such as Environment (waste water management).
“These verticals are profitable it is not that we will scale down the business we want to divest as the packaging matters for not undermining its value. The exciting part is not about what we are exiting but what we are growing. Our five focused verticals contribute over 50 per cent to our overall business. We are in the market for acquisitions in some of these five verticals to gain technology and customers. We have Rs 120 crore in our treasury which will be utilised for the same. With this strategic transformation and following our financial growth till now, we are looking at closing this fiscal with a double digit growth,” Aditya Rao, Vice CMD, Pennar Industries Ltd.
Pennar Industries has a total headcount of 10,000, of which 3,000 are direct employees. Over the next five years, the Company will be expanding its engineering teams such as process engineers, structural engineers, building information modeling engineers and so on.
