What's a company guided in spirit by the logic of lifestyle-oriented businesses doing engineering exceptionally complex components for some of the most exacting manufacturers in the world? The straightforward answer to that: because it makes sense.
While Titan's heart is set on exploring every opportunity in the lifestyle space, its precision engineering project is a mind thing. An idea that grew out of the company's proven capabilities in the intricacies of watch-making, the precision engineering division (or PED) is an endeavour to carve a profitable niche in a business with immense potential.
Established in 2005, the division comprises four main components, one that crafts precision products for industries such as aerospace and oil and gas, a second that delivers automation solutions for automotive, pharmaceuticals and other businesses, a third for the tooling that high-accuracy products require, and a fourth that assembles printed circuit boards.
With close to 4,000 employees and three facilities, the division is positioning itself to get a slice of a large and growing global market that is pegged at $32 billion a year. Tremendous as this sum may seem, it is not the only bait that got Titan to bite. The company was also taken in by factors such as India becoming — not least due to cost benefits — a manufacturing base for precision products, the long-term nature of prospects in the industry, and the opportunity to balance the risk involved in its bread-and-butter consumer businesses.
“High-precision manufacturing has been a core competency at Titan,” says NP Sridhar, head of business development at PED, explaining how and why the division was seeded. “It is one of the pillars of our growth and it is where our skills have come from, including those for automation solutions.”
This market seems bigger still considering that India is expected to spend upwards of $100 billion on defence supplies over the coming few years, with much of these supplies slated to be delivered by foreign companies. The sure-shot element in this equation for entities such as PED is the offset clause imposed by the Indian government, which makes it mandatory for 30 per cent of all defence material to be made in the country.
“There are not many companies that have the capability to do what we do,” says Mr Sridhar. “We got going with aerospace in a small way but we invested plenty along the way. We have this market opportunity and a unique capability to address that opportunity.” And it's not just aerospace that interest PED; there's oil gas exploration and the medical industry, not to mention the automation spread. “Our turnover could be in the range of Rs10-15 billion in five years."
There are challenges to be overcome before that can come to pass. “Gestation periods are long in this business,” says Mr Sridhar, “which means you need more time for the business to mature. It could take five years, maybe even a decade. You need deep pockets and you need to stay invested for an extended period of time.”
Getting the talent to realise its objectives is another challenge. "We are finding it extremely difficult to find the right people,” says Mr Sridhar. The problems don't end there. “We have to make money to justify our existence. We have to retain customers. We have to interact with talent, keep them motivated in a small business that has ups and downs and where questions abound.”
Tata, rather than Titan, is the calling card that the precision engineering boffins prefer to use. “Outsiders see Titan as a watches and jewellery company,” explains Mr Sridhar. "When I tell people I'm in a high-technology engineering company they don't believe me. Tata is a far more relevant brand name, in the circumstances, to attach ourselves to.”
That's not so much an issue for the people in the automation solutions part of the PED family. There the effort to attract customers from industries other than automotive has begun to yield results, with orders being executed in the past year for leading electrical and medical devices companies. Furthermore, export orders from China, the Czech Republic and Bulgaria were executed.
The present is a pleasant enough place for Titan's precision engineering folks, but it is the future, with all the bounties that beckon, where the real action will be. So what if lifestyle has nothing to do with it?