Mumbai: “Bharat Forge Ltd is betting on renewable energy space such as solar and biomass energy as it diversifies from its auto parts manufacturing core," executive director Amit Kalyani said on Monday.

“Solar is becoming increasingly viable. Over a 3-4 year period we will target to do 100 MW," Kalyani said, adding it expects to start with 20-30 MW capacity initially.

The government’s recently unveiled solar power mission offers financial incentives and tax holidays for utilities in order to take India’s solar generation capacity from near-zero level to 20,000 MW by 2022.

Solar power projects typically require more than three times the investment needed for a thermal power project, but the government’s solar mission aims to bring down the cost, to attract investments into the untapped sector.

“We already have land where we can set up upwards of 100 MW of solar, in various parts of India," Kalyani said.

Bharat Forge, India’s top forgings maker,is also planning to generate power from waste and biomass and is talking to many urban governing bodies though nothing has been finalised.

“Waste in our cities? Instead of a problem, can be a solution," Kalyani said.

“We are working on projects, we are giving proposals to cities, but nothing has fructified. You have to create awareness," he added.

“A group firm Kenersys which currently has a order pipeline of 300 MW worth wind turbines from India and Europe is increasing capacity to 800 MW annually, with half each in Europe and India," Kalyani said.

“Bharat Forge, which has a joint venture (JV) pact with France’ nuclear power major Areva to produce heavy forgings for the nuclear sector, expects to work out details in the next six months," he said adding: “We have made a lot of progress with Areva. Areva itself has made a lot of progress with the Indian government."

“Once they have a little more clarity on their going forward, we will go ahead and set up a manufacturing facility," he added.

Rail Business

“The firm is also expecting to substantially increase its revenues from the railway component business given the robust outlook for the sector," he added.

“I think there is going to be major upgradation of the rolling infrastructure in the Indian railways, that is where we see a large opportunity coming to us," he said.

Bharat Forge which currently makes railway locomotive components worth Rs200-300 million annually is targeting Rs5 billion in five years.

“We have already seen the visibility well beyond Rs1.5 billion," he added.

Bharat Forge gets 80% of its sales from the automotive business now but aims to raise its non-automotive share to 40% by FY12. Its board has approved raising up to $150 million to invest in its non-auto segment.

Kalyani said that the firm is operating at around half of its total automotive capacity of 240,000 tonnes in India and hence does not need to invest for further expansion.

Bharat Forge makes forgings for commercial vehicles and cars and has facilities spread across six countries spanning Europe, US, India and China.

“We have a huge capacity already in place, we are operating at roughly 50% capacity utilization, so at least for the next one or two years we don’t have to worry about capacity", he said.

“There were no plans to add capacity in any of its overseas plants," he added.

Shares of the firm provisionally closed down 0.68% at Rs242 in a Mumbai market that was a tad up.