Despite continuous decline in sales of automobiles during the first two quarters of FY20, Greenfuel Energy Solutions Pvt Ltd – manufacturer of high pressure components for Compressed Natural Gas engines – is expecting revenue to remain flat or grow marginally. The rationale behind such an expectation is modest decline in sales of CNG vehicles as compared to petrol and diesel ones in the last few months.

The Gurugram-based company is also likely to venture in the aftermarket segment like many other component manufacturers, as it plans to open another source of revenue, apart from supply to Original Equipment Manufacturers (OEMs).

According to Akshay Kashyap, managing director, Greenfuel Energy Solutions Ltd, after the introduction of Bharat Stage 6 emission norms the availability of substandard parts will reduce significantly in the aftermarket which will generate opportunity for the company to enter the space.

“Sales of CNG driven vehicles are flat this year which is a good sign for us but it’s below our targets since the sentiment in the market is down. So, this year we expect revenue to remain flat or grow marginally. We are very bullish on CNG business since it will be a viable option for the next decade or so, since electrification of mass market passenger vehicles will take some time. Also some part of the commercial vehicle segment, like buses, will get converted to CNG as well. Hence we are investing in localising our products for the CNG systems," added Kashyap.

Apart from manufacturing components for CNG engines, Greenfuel has also invested around 11 crore for assembling battery packs for two- and three-wheelers in India and out of that almost 7 crore has been invested in research and development for localization of the products. The company is expected to invest around 25 crore in the next few years, in the electric mobility space, especially in assembling lithium ion batteries and establishing battery storage facilities.

India’s leading passenger vehicle manufacturer, Maruti Suzuki India Ltd is counting on CNG and hybrid powertrains to be the interim solution before shifting to electric powertrains.