Sansera Engineering

[ChotuKatappa]

About
40+ years old manufacturing company that makes precision engineering components for automobile and non-auto industries.
In automobiles: Serves almost all major OEMs
In non-auto: Serves defense and aerospace industry - working on entering electronic sub-systems

Promotor: Mr. Sekhar Vasan - IIT / IIM Alumni (read here)
CEO: Mr. B. R. Preetham (has always been here - LinkedIn)

What’s interesting about Sansera

1. Stickiness of customers: They have been working with almost all major OEMs. Interestingly these relationships last quite long.
   a) In 2W segment: Over 18 years of relationships with leading 2W players such as Bajaj Auto Limited, Honda Motorcycle, and Yamaha Motor India.
   b) With Maruti Suzuki India Limited for 30+ years, and with Fiat Chrysler Automobiles for 10+ years
   

   

2. Largest domestic supplier of connecting rods: Has a market share of 2% to 3% for connecting rods for light vehicles (PVs dominantly) and CVs globally.

3. Strategic Investments and Capex: Company has been doing significant capex. Also, exploring opportunities in electronic systems and autonomous driving sub-systems.
   a) Investment in MMRFIC Tech Pvt Ltd. This company is being by ex-Texas Instruments engineers. This company seems to be involved in making electronic subsystems used in defense/telecom/security. (source: employee profile)
   b) Company has setup a new facility for aerospace and defense. This should start showing results from FY24. Management expects a CAGR growth of about 25% to 30% in aerospace for the next three years. This facility was built much before the time management initially quoted
   

   

4. Trackers: Company expects to diversify topline-> auto v/s rest in 60% to 40% ratio.

Financials

Company’s Products

Risks:

1. Client Concentration: Top 5 customers used to contribute over 50% to its topline during 1HFY22. However, the company has been diversifying this and it has fallen from over 70% in the last 7-8 years.
2. Accounting Red Flags: I haven’t checked. I liked the management and betting on my instincts for their honesty so far

Relevant Links:

1. Screener
2. Rating Agencies - ICRA / Fitch
3. Management’s Outlook commentary - CNBC Tv18

Disclaimer:

• I am Invested from quite low levels (PF sizing here). Safe to assume, I have interests here.
• This is not a recommendation advice. Please do your own research.

[Aarti]

valuation is quite high - it seems to have discounted future growth… if sales dont increase price could correct.

[ChotuKatappa]

Q1 FY24 Results

• YoY - 24% Sales / 30% PAT growth
• YoY order growth from EV segment
• Haven’t gone through the concall yet . Incase anyone goes through, please update

[ChotuKatappa]

Excerpts from Concall Q1FY24

• Demand is coming from off-road segment
• New client: Cummins
• Order book: Rs. 16.9 billion as on 30th June 2023 v/s 13.3 billion as on 31st March 2023
• Cx Stickiness: Received Platinum award from Raytheon Group which is the second highest award in their group (imo, genuinely seems like a difficult to get award)

Guidances:

• Targeting to grow 2x than industry - 20% growth, 20% EBITDA, 20 ROCE
• Aerospace sector: ~50% growth. A recovery in performance should happen in upcoming quarters
• MMRFIC: Need another 18 to 24 months
• Debt: Expect overall debt to be between 680 to 700 by year-end
• Expect degradation of working capital cycle - due to international market. EBITDA margins could slightly improve
• Look for End of Q3 (I am assuming Q4): Plan to add capacity in US could be finalized. Company is already supplying to GM/Tesla and now cummins

***** The below section isn’t from concall ****

About Raytheon Group and the award

• American multinational aerospace and defense conglomerate
• One of the largest aerospace and defense manufacturers in the world by revenue and market capitalization, as well as one of the largest providers of intelligence services
• Large military contractor for U.S.A

Source: Wikipedia and RTX website

[VALUE2017]

Q1 FY 24 SANSERA ENGINEERING LTD

[manojmph]

6538967846e7424ebdb32f73304b3480-18092023.pdf (654.5 KB)

ICICI Securities:

Targeting 20% RoCE amidst executing growth capex
We interacted with the management of Sansera Engineering (SEL) to get mid-year update on its business execution
and outlook ahead. Following are the key takeaways: 1) Revenue is on course to meet the target of ~40% growth in exports in FY24, including ~50% growth in aerospace segment; 2) supplies to Triumph and Harley for the newly launched indigenised models would add to 2W segment revenue growth along with continued premiumisation of overall 2W market; 3) EBITDAM is on track to be at 17-18% in FY24 and inch up potentially higher in FY25 driven by the rising mix of exports/aerospace; 4) despite capex of INR 2.8-3bn p.a., SEL is confident of crossing ~20% pre-tax RoCE by FY25. We retain BUY on SEL with an unchanged target price of INR 1,133, implying 20x FY25E earnings.

[ChotuKatappa]

Update: "Company has made a total investment of Rs. 19.54 Cr (26%) in CleanMax Enviro Energy Solutions Private Limited (CleanMax) "

Find more details on notification - HERE

Found this info for CleanMax

[DrHarshilRohit]

Axis Bank acquires stake in Sansera. Stock will most likely shoot up in coming weeks. Good news for us minority stakeholders.
Disc- Invested, 5.3% of portfolio

[acuite2024]

Investor presentation Feb 2024- Key takeaways

Q3FY24 Takeaways:

Despite being a sluggish quarter, the company reported highest ever Q3FY24 revenues (up 27% at Rs 713 cr) and EBITDA. The growth was broad based across all the segments- Auto ICE, Auto-Tech Agnostic & xEV, and Non-Auto. Net profit for the quarter was up 55% at Rs 48.4 cr.

The Auto-ICE segment is benefiting from the premiumization play in the auto industry with higher content per vehicle. In fact, SEL witnessed highest ever quarterly revenues in the 2W-Motorcycles segment primarily on account of premiumization.

In terms of sub segments in the Auto ICE category, revenue mix stood at 36% (Motorcycles), 6% (Scooters), 23% (PV) and 10% (CV).

In terms of geographies, domestic revenues (69% of sales) were up 27%, while international business (31% of sales) grew at a higher pace of 32%.

For 9mFY24, revenues and profits were higher by 20% and 25% at Rs 2066 cr and Rs 141 cr respectively. In terms of revenue mix, Auto-ICE segment accounted for 76%, Auto Tech agnostic- 7%, xEV- 5% and non-auto- 12%.

It continues to see higher business from new customers and expects the growth momentum to continue with an order book for new business at Rs. 2 bn, which is spread across segments. It received incremental orders of Rs 700 cr in 9mFY24 and its order book as on Dec 2023 stood at Rs 2040 cr (Domestic 41% and global 59%).

It has a wide portfolio of products across 80+ product categories catering to 96 auto and non-auto customers across 27 countries.

The electric mobility segment (xEV), SEL is witnessing strong growth. Revenues jumped from Rs 7.2 cr in FY22 to Rs 82 cr in FY23. For 9mFY24, sales stood at Rs 88 cr. It has 16 clients in this segment (10-2w, 4-PV, 2-CV). Net debt as on Dec-23 stood at Rs. 6.2 bn (Net debt/Equity -0.47), ROCE-16.6%, ROE-14.4%.

It has 17 manufacturing facilities (including 1 in Sweden) and a team of over 500 engineers. Its technology strength lies in the manufacturing of complex and critical precision forged and machined components which enables it to cater to global OEM’s. In the non-auto segment, it has its focus set on Aerospace and Defence segments.

SEL has a strong track record of growth. During FY13 to FY23, revenues grew 16% CAGR, while the growth in PAT was higher at 20%. Going forward, the company intends to change its revenues mix to 60% (currently 76%) from Auto-ICE segment, 20% from Auto-Tech agnostic segment and xEV segment (currently 12%) and 20% from Non-Auto segments (currently 12%).

As a strategy, SEL aims to consolidate and increase its market share in the Auto ICE segment. For the Auto- Tech agnostic and xEV segment, it plans to further strengthen its foothold in the business and leverage its existing capabilities in select product segments like aluminum forged components. Through its non-auto business, it plans to diversify into other categories with a view to increase its addressable market. It is also open to the idea of exploring inorganic growth opportunities.

Key demand drivers/trends in the Auto ICE segment:

-Faster engine upgrades
-China + 1 theme
-High focus on light weighting

Key strengths in non-auto segments:

-Strong relationship with top aerospace OEMs as well as with their Tier 1 Suppliers
-Multiple growth opportunities in Defense driven by Government’s thrust on Atmanirbhar Bharat

• Large order wins in Aerospace vertical

FY23 revenues-Rs 92 cr. At full capacity utilization- revenue potential of Rs 350 cr.

[abhishek_sinha]

Came across a 7y old video that explains their expertise and history. Do watch it
Making It Big Season 7 Ep#5 Sansera Engineering (youtube.com)

Looks an interesting business.
Revenue has grown from 18 to 800+ cr. b/w FY01 and FY 2016 (27.4% CAGR)
Optionality - A&D : Co has already made significant progress here.

Noting down some quick observations

1. Co has come a long way from being a basic part supplier to T-1/cocreator
2. There is a lot of emphasis on tech and automation
3. Driven by technocrat promoter + professional management

Disclaimer: Not an advice. Invested in family and client accounts.

[Mohit_baid]

9f5ea390-5dfd-4ee5-b514-2c66e5f95f9d.pdf

[divygupta]

There is a plant visit scheduled by the company, in which I am participating; if the people tracking the stocks have any specific question, please either DM me or post it on the thread. Will try to get answers where possible.

Disc: Not invested in the company.

[Mohit_baid]

Thank you for giving us this opportunity, I would like to know if Sansera plans on acquiring the entire 51% stake in MMRFIC after the semiconductor development, if so what topline contribution can we expect to see post-acquisition?

[divygupta]

the mgmt have mentioned that they plan to acquire the 51% within 2-3 years; refer screenshot of the Q4 transcript

you were asking for this or i mis-understood your question; also will check on the top-line contribution pst acquistion; for FY25 they are expecting 20 Cr

[Mohit_baid]

Yes, I am aware of all these reasons why I mentioned the 51% stake but all this happened before the recent semiconductor packaging/assembly unit development in MMRFIC so post that development things should have positively changed for MMRFIC and so my question.

@Mohit_baid

https://www.bseindia.com/xml-data/corpfiling/AttachHis/9f5ea390-5dfd-4ee5-b514-2c66e5f95f9d.pdf

[divygupta]

Plant Visit Notes

Date 23Jun

Biddadi Plant 11: Interaction with the plant head

1. General Info:
   a. Plant head is an ex-Bosch employee who moved to Sansera in 2019-20
   b. Plant 11 is focused on automotive parts doing forging, machining of steel parts and for Aluminium parts it does the forging/casting, machining and anodizing
   c. Currently the plant contributes to 500 cr of revenues, and is spread over 15 acres of land; there is construction going on which will max out the capacity of the plant; post expansion this plant can support 1000 cr of revenues (mgmt in transcripts have mentioned 400-420 going to 800-850 post expansion)

2. Clients serviced through this plant:
   a. BMW for Aluminium parts (80% of Al revenue is through BMW; overall Al is 20% of revenues, currently manufacturing 42 parts for BMW, and this is expected to increase to 143 parts by Jun’25 [not sure if this part count increase is BMW only or overall]), Daimler (for both India + Exports), Cummins, Stellantis, Polaris (for ATVs), Bajaj + Triumph (currently through T2 but direct relations also starting)
   b. EV clients: Ola, TVS, Bajaj Chetak, HMSI (suspension parts for Activa EV), Ather (side park stand)
   c. Recently started for Jaguar EV (first car part known as end-cap being manufactured), business has just started; peak revenues to come from FY26
   d. Overall Sansera Level:
   i. Korean Clients: Currently the company doesn’t services any korean clients, however their facilities have been inspected and audited by Hyundai (seems Hyundai does this on behalf of Kia as well); but no movement on orders as of now
   ii. Mahindra also in talks/coming to Sansera
   iii. Ford initial product for testing to be delivered in Oct’25; Go-live from Aug 26

3. Raw Materials:
   a. Inventory maintained for about 45 days in the Plant; they also have a warehouse in Germany where another 30 days of inventory is maintained
   b. Steel vs Aluminium
   

   

4. Defect rate of Al is higher due to softness of the product, parts being more aesthetic in nature; manufacturing defect also arises due to variation of temperature in the furnance, company has learnt about it over a period of time and is trying to control these variations

5. Current Infra:
   a. Products: Steel forging and Al casting
   b. To manufacture these products, the company uses tonne presses (e.g. 4,000 Ton Ajax Forging Press, this is not Sansera presses but mentioned for understanding) which compresses the steel/aluminum products into the desired shapes
   c. These presses are procured from China (Shang De named vendor), in total 4 presses in operations

6. Expansion:
   a. They are in the process of procuring three more presses 1600T, 2500T, 4000T; all are expected to be delivered in the next 6 months
   b. Post getting these presses esp 4000T, Sansera can start producing auto comp (body internal + external) for 4Ws and heavier vehicles
   c. Currently for Cummins [non-auto] they procure the forged connecting rods from CIE and then do the machining work; once the 4K Tonne press comes in, they would be able to manufacture these parts in house; currently they manufacture one connecting rod, once the 4K press comes in, they can manufacture 4 more new models; Cummins is a difficult client, they want the forging to be done in-house
   d. Currently they manufacture 1.5L parts, aim to increase it to 4.5 lakhs within 2-3 years
   e. Company is in the process of finalizing land deal for 50 acres

7. Competition:
   a. For Al parts → Bill Forge (acq. by CIE) in Faridabad is the only other competition as Sansera is doing Aesthetic parts where the quality requirements of the customer is very high, there is limited competition
   b. For Steel parts → Amtec, Amul, Fortune; one of the players shut down among the three (most prob Amtek Auto) which allowed Sansera to make an entry into Tata Motors where its ramping up the business now

8. Aluminium Parts:
   a. Area where Sansera differentiates itself is that it provides all the client requirements under one roof
   b. Requirements means → Solution Treatment, Heat Treatment, Casting, Anodizing, Painting
   c. In-house Anodizing is critical esp for aesthetic parts; as the final product quality gets discovered post anodising; in 2022 when the company started Al products, they were facing 25% rejection rates and the company was using a vendor from Pune for anodizing; they subsequently got the competency in-house and has gotten the overall reject rates to 5% (tgt is 2-2.5%)

9. Overall Sansera related points:
   a. Sansera’s differentiators are: Traceability of product raw materials, Automation, Process Knowledge, Speed to Design, Vertically integrated manufacturing
   b. Post IPO company has gotten into place lot of new things to drive scalability, like New Product development department, central procurements, moving from process engineering to CoE for Tech manufacturing, structure financial approval/planning
   c. Ability to design in-house machines which costs 50Lakhs vs 3-4 cr if bought from outside; however these machines which are manufactured in-house are special purpose machines which can be used for mulitple things allowing fungibility in the manufacturing purposes; Sansera has a team of 60 engineers who only focus on the manufacturing of these SPMs

Management meeting: CEO, Founders (MD and Jt. MD), CFO

Discussion focused more on the aerospace and defence capabilities

1. Evolution:
   a. Aerospace and Defense business was started in 2010, however at that time most of the business coming to India was overflow (capacity o/s) or low value add business
   b. Breakthrough for Sansera came with the order of manufacturing power drive housing units for aircrafts (POWER DRIVE UNIT TIPS✈ CARGO #aircraftmechanic #aviation #aircraft #cargo #airplane #PDU #shorts this unit directs the cargo for optimal space utilization)
   c. Since then the products offered by Sansera has increased to Actuators for planes, flap tracks, and is now trying to move into higher value added parts in engines and landing gears
   d. The main issue in aerospace business is that its takes a long period for the OEs (Boeing, Airbus of the world) to trust a manufacturer upto 10 years; (seems that Sansera has put in those hard yards, and is getting traction from the Oes)
   e. One of the reasons for Sansera to enter the aerospace was that a lot of tech of aerospace gradually moves to Automobiles and thus presence in Aero also helps them prepare for the Auto tech
2. Business:
   a. Current customers: Boeing 60% (T1); Airbus 40% (T2/3, direct billing under progress)
   b. Revenues comes from MRO + New Planes
   c. Expect to grow 40-50% due to lower base effect (one program of Boeing got shifted to FY26)
   d. Current new plant can do 350 cr full capacity; current infra can do 250 cr
   e. Being export business margins are 6-8% higher
   f. 25% EBITDA margins are possible for the business
   g. Movement from ICE focus to other businesses:
   i. Mgmt saw the transition towards EV, while they didn’t see that there would be an overnight shift to EV, they started diversifying revenues
   ii. Started leveraging their precision manufacturing capabilities and more towards safety, higher emission norm
   iii. Now they are seeing Hybrid as something that would go-up before eventual EV
   i. Wrt machines and Plant:
   i. Aerospace machines are Japanese manufactured, they don’t allow manufacturer to use their machines for Defence purposes
   ii. Defence machines are German
   iii. Limited Sansera manufactured machines (saw one Sansera machine out of 72 CNC machines in the plant)
   iv. Defence players don’t like inter-mingling of infra, and therefore the company created dedicated plant for this business (separate segregation of Defence manufacturing in the Aerospace and Defence plant)
   j. Defence:
   i. Manufacture for HAL helicopter plants
   ii. Manufacture canister for Brahmos missiles for L&T
   k. MMRFIC:
   i. Started by technocrats who worked with DRDO to get product approvals for over 3.5-4 years
   ii. The company was looking for investors to help in the scale-up of the business given approval were in place, that’s where Sansera comes in
   iii. Of the products that MMRFIC has approval for, two main products discussed:
3. Gimbal based seeking radar
   a.
   b. Each of the black text items are individual components which gets approved individually by the DRDO
   c. This component goes inside a high-end missile which can stirke a target with an distance of 1m
   d. MMRFIC is qualified for 4 components, the DSP is approved for by some other vendor (also this is the way that DRDO functions, no vendor whole approval)
   e. There is opportunity for Sansera for being the final integrator, with 4 components coming from MMRFIC and one by the other vendor
   f. Currently India imports these items from Belarus and Israel costing 3.5-4.5 cr per unit; with Sansera+MMRFIC the whole thing can be done at 1.3-1.4 cr costing
   g. Demand in qty can be 2000 units over 4 years
   h. Application is also in bombs (to trigger the fuse for ignition), drones
4. Surveillance radars
   a. Radar for usage of surveillance at border areas where visibilty is a challenge (e.g. Siachen, Indo-China border in winters)
   b. These radars are size of a credit card, and can be put on the back pack as well
   c. Company expected to get grant of 12 cr
   d. Along with defence, the application is also in automobiles which is like ADAS/sensing ahead
5. AESA: Aircraft deactivate radar beam bomber
   a. Can deactivate radar/beams which comes under its area
6. Expect 20-25 cr revenues from MMRFIC w/o including the grant
   iv. Sansera is also pursuing capability developments for semiconductors

Automobiles business:

1. Question was on moving up on the sub-system vs component: Currently to OEs like Maruti, Sansera is providing only Connecting Rods; but Maruti is expecting the Auto Ancs to combine Piston and Connecting rods and supply in one shot; given Sansera is focusing on Connecting Rods only, the option is to tie-up with a pistons manufacturer and package and deliver to Maruti; however it’s a tedious + manual process with limited value add, and margins may come down, which is not what Sansera does → need to confirm what Sansera finally decided to do with this
2. Scooters (6-8% of revenues):
   a. For ICE customers include: HMSI, Suzuki, Yamaha (for Suzuki and Yamaha the component counts have reduced)
   b. For EV: Ola, TVS, Ather, Chetak, HMSI (stem comp)
   i. Wrt Ola: Not working at desired margins but working at acceptable margins
   ii. Ather + HMSI → supply limited components
   iii. Components supplied includes: stam comp, suspension base, side stand (which has become complicated forging due to aluminium and light weighting)
3. Motorcycle
   a. EV adoption might be far way down the line, this is driven due to speed and range requirements; as speed and range requirements go-up so does the battery which means far higher light weighting would be required and costs goes up due to higher cost of Al
   b. Currently providing Cat A&B (which are customer visible & aesthetic parts) mostly for 400+ CC machines; this is possible only due to higher costs of these vehicles which allows the cost absorption of higher Al
4. Biddadi plant would max out with 10 presses, and currently they are booked out; this is in spite of not having approached the 4W for Al parts
5. When they started they were focused on connecting rods business, but toyota pushed them to do more components as they didn’t like one product only vendor; slowly grew offerings to 22 products; now they supply these 22 parts + 4 shaft products (2 finished and 2 semi-finished) which are EV compliant as well
6. Case study of product quality:
   a. An OEM wanted 12-14 parts; Sansera won 8-9 parts and remaining to other vendors
   b. The OEM had a requirement of 1800 hours xenon testing (which basically means the color on the parts have to remain same over 3-4 years)
   c. After 2-3 years the client came back to Sansera to give order for the remaining parts as other vendors were not able to give that performance
7. On Hyundai and Kia: Facilities are audited and cleared

Current Kit Value per vehicle

Financial Metrics/Ratios:

1. Capex done in a particular year is for revenues for 1.5-2 years hence; customer gives order only when there is capacity
2. Export vs Domestic margins: 6-8% higher
3. AR Domestic 40 days; exports 110 days
4. Inventory domestic <50 days, exports 160 days
5. Tgt exports level: 35-40% in 2-3 years
6. Last 2-3 years due to all the logistics issues, OEs are following a supplier managed inventory model
7. Machine life is 20-25 years

AEROSPACE AND DEFENCE PLANT:

1. Currently manufactures 1550 part counts/SKUs; manufactured 25000 parts
2. Part upto 2.2 meter length being manufactured (mostly air plane’s tail cone)
3. What OEs want is special project capabilities which basically means coating functionality
4. Plant is highly automated:
   a. The production of a particular item is pre-programmed by engineers centrally
   b. A block of material (say Al/Titanium) is put in the CNC machine
   c. Then the CNC machine executes these instructions one after the other
   d. There is an attender on the machine (as product manufacturing matures, one person can handle two machines at the same time), person is required to take noting at some defined intervals
5. Intensity of work with Airbus is increasing as the company becomes a T1 supplier; 4-5 team visits are planned within the next month
6. 40 employees are working on the R&D which focuses on how to manufacture the products more efficiently (wrt time, material consumed)
7. Current revenue break up Structural components 15%, Actuators 25%, Avionics just started
8. Current rejection rate of 0.75%
9. Airbus had a european manufacturer for actuators, however due to cost and relative quality issues, Airbus gave Acutators manufacturing to Sansera; for A350 and A320, Sansera is the single source manufacturer
10. Defence current utilization is ~30% which in 6-7 months is expected to hit 60%
11. Airbus Defence visit planned in July, for becoming a T1 vendor for them

[ChotuKatappa]

@divygupta - Thanks for sharing the details. It was a fascinating read.

Have a question: Has this experience changed your views on thhe company in any way? If yes, can you you share what/how?

---

Disclaimer: Invested in Sansera. Not a recommendation for anyone.

[divygupta]

Not invested currently, developing a view on it; growth in top-line is the biggest thing, so trying to develop a sense on it.

[abhishek_sinha]

@divygupta Thanks for sharing these notes. Very helpful. I would like to share some quick notes that I had prepared for MMRFIC. Please ignore grammar / flow errors.

Sansera - MMRFIC

TLDR

1. Sansera Engineering has a stake in deep-tech startup called MMRFIC. The deal is a steal given that the startup is bootstrapped and developing a technology that is extremely difficult to replicate.
2. MMRFIC develops MM wave radars that find object and motion detection applications across industries including automotive, A&D, healthcare, industrial, robotics etc.
3. Optionality: It’s a great option to have given the MMRFIC team’s technical knowledge and experience in semiconductors. Could pave the way for Sansera to enter into A&D space. MMRFIC could leverage Sansera’s strong network in auto space for commercialization. MMRFIC is frontrunner in India in MMWave RF radars
4. Risk: Commercialisation, product acceptance might take longer than anticipated

About MMRFIC

May sound like a buzzword but MMRFIC is indeed a deep-tech startup (lengthy R&D and significant capital investment before commercialisation).

MMRFIC is a semiconductor startup that develops MM Wave Radars.

BusinessWorld - MMRFIC is a fabless semiconductor startup with a focus on mm-wave products for a wide range of markets, including next-gen radars for drone surveillance, advanced communication technology targeting (5G and 6G) and wireless connectivity solutions for healthcare. The bootstrapped startup has been a profit-making venture for more than seven years and has been granted six patents globally.

MMRFIC - MMRFIC’s unique expertise in MMIC and RFIC enables them to offer world’s most

integrated, robust, reliable and easiest-to-use MMW and RFIC solutions…MMRFIC has expertise in handling MMW, RF and AMS design and layout at chip or module level along

with floor planning for multi-level blocks and their integration in different process nodes and

packaged Silicon.

References:

What is MMRFIC (30 mins onwards in this video)? 3. IESA India Fabless Conclave 2018 - Part 3

Why did Sansera invest in MMRFIC? Sansera Signs a Definitive Agreement for a strategic investment in MMRFIC Technology Private Limited

A R&D Company That Is Doing Tech Startups Proud (businessworld.in)

PowerPoint Presentation (radarindia.com)

What is MM Wave?

• Miniaturised form of radar.
• Millimetre wave Radar Uses radio waves to detect object position and distance
• MMWave sensing is similar to how a bat uses echolocation to navigate and feed in the dark.
  • Bats emit a high frequency call and then listen for the reflections / echo. Depending on the time taken and phase difference of the reflected call, the bat can identify the prey and navigate
• An MMWave sensor emits a Chirp (FM Continuous wave)
• Above 60 Ghz - maintains accuracy even in dusty environments, works well even in low-light conditions and dazzling light conditions
• Differentiator - It can determine the object’s dynamic information, such as range, velocity, and angle of arrival (AoA)

Learn more: What is mmWave sensing ? | Mouser Electronics | Texas Instruments

Applications

• Sensor’s basic application - Presence and motion detection
• Satellite remote sensing
• Missile navigation
• 5G communications
• Millimetre-wave radar has been used in luxury cars since the last century
• Defence - Seeking the targets and guiding the systems
• Potential applications
  • ADAS
  • Healthcare / patient monitoring
  • Industrial applications
  • Vehicle anti-collision (including trains)

References:

Sensors | Free Full-Text | Recent Advances in mmWave-Radar-Based Sensing, Its Applications, and Machine Learning Techniques: A Review (mdpi.com)

Short range radar demonstration using TI’s mmWave sensors

Sansera’s investment rationale in MMRFIC

• Technologies not available in India at present (imported from US, Russia and Israel)
• With Defence + electronics + indigenisation focus, eventually these components/technologies will benefit from import substitution
• Geek/Technocrat promoters (ex Texas Instruments): Low profile, tech focused, skin in the game
  • The team has a proven track record in delivering products up to 110GHz
• Small, focused, Bootstrapped, profitable - No frills
• Has been working with BEL, HAL and other A&D companies: most products yet to commercialise but definitely has a foot in the door

Product portfolio

1. W Band Radar - Auto and Industrial
2. Proprietary Beam Formers - Comms (5G, satellite) and Radar
3. IP - Low Power RFID @5.8GhZ - Commercial and industrial

Global peers

• Texas Instruments
• Delphi
• NavTech
• Bosch
• Continental
• NXP

Demerits?

• Long gestation - R&D-focussed
• Commercialisation of some products still a few months/quarters away

Recent Progress

• Moving towards Commercialisation - around 6-8 quarters away
• Most of the radars are mill-tested, field testing going on
• Added new R&D + packing facility

Alternative technologies

• Compared with lidar, the millimetre-wave seeker has better penetration ability to fog, smoke and dust.
• The disadvantages of millimetre-wave radar are also intuitive. Its detection range is directly limited by the loss of the frequency band (if you want to detect far, you must use a high-frequency radar), it cannot sense pedestrians, and it cannot accurately simulate all surrounding obstacles.
• The maximum distance of millimetre-wave radar is 1 km, while lidar is only 300 meters.
• Millimetre-wave radar has general recognition ability, strong penetrating ability, and is not easily affected by the weather environment; Lidar has high accuracy and poor penetration, and is easily affected by dense fog, rain and snow.
• The cost of radar is relatively high, but Lidar is even higher.

Inference - For most commercial operations, a combination of the above technologies will be / are being used.

Source: Best of Both Worlds: How mmWave Can Bridge the Gap Between LiDAR and Radar - Engineering.com

TI mmWave radar vs LiDAR demonstration

Key application: ADAS

• ADAS: Advanced Driver Assistance System - Prevent accidents and enable safer driving
• Adoption in India - 2% of PV sales but growing fast
  • Of this - Mahindra XUV700, MG Hector, Tata Harrier, Tata Safari account for 67%
• Market set to explode - customers’ demand and govt’s push for vehicle safety

Resources:

ADAS in the driver’s seat | CRISIL

BriefCASE: More twists than a Bollywood plot - India’s road to ADAS adoption | S&P Global.

Appendix: Other applications

Industrial

Medical

Robotics and automation

Security and surveillance

References

17132552990.83466200.pdf (business-standard.com)

Transcript-of-Earnings-Call-Q4FY23-1.pdf (sansera.in)

Seminar on Intelligent Reflecting Surfaces organized by IEEE COMSOC Bangalore on 30th Jan 2021

The fundamentals of millimeter wave radar sensors (Rev. A) (ti.com)

Millimeter-Wave Radar - an overview | ScienceDirect Topics

17132552990.83466200.pdf (business-standard.com)

List of LiDAR Players in China. When it comes to LiDAR for autonomous… | by Shuai Chen | Medium

For those looking to dive deeper - Read this paper
sensors-23-08901.pdf (7.3 MB)

[divygupta]

@abhishek_sinha quite a detailed note; wrt MMRFIC <> Sansera, one item i am not able to get a handle on is what does Sansera bring to the table for MMRFIC;

Sansera’s competency is forging, machining of parts, while MMRFIC products are more fabrication led which has no overlap with Sansera’s core expertise;

so Sansera’s value add is not clear; it can connect MMRFIC with customers but thats the max it can do; it can’t add anything to the R&D, nor support in manufacturing (atleast till now), may be play some part in integrating the components for the A&D clients that MMRFIC brings/wins, is it that much only?

Any idea?