• Young Turks

His is a success story of a private sector’s entry into the Indian defense manufacturing space. 33-year-old Puneet Kaura’s SDS was launched in 2004 and manufactures cockpit displays and systems for military as well as commercial aircraft. A graduate from Bentley College in the U.S. Kaura, after a stint at Samtel Electron Devices in Germany, returned to India in 2004.

It began with the signing up of a MoU with the Defense Research and Development Organization in 2004 to develop indigenous technology for cockpit displays for Sukhoi aircraft. Today, SDS is the only private company in India that manufactures avionics products and equipment for military as well as commercial aircraft.

But what fuelled Kaura’s passion to get into avionics? “I went to an air show when I was very young. When the fighter jets flew over my head, I was so excited. That was the beginning of this passion,” recalls Kaura.

The product portfolio of the business is impressive. Kaura started with manufacturing cockpit displays and is now diversifying into avionic suites. He is also getting into products like electronic warfare suites or certain high-end avionic products that are used by both fighter jets and commercial jets to become a complete avionics company.

Ask him about being the man behind the SDS-HAL joint venture of 2006 (the first public-private partnership in defense avionics) and Kaura says, “This JV was really our first brick into the defense world. Samtel-HAL Display Systems is a company which is required to manufacture cockpit displays for different HAL programs. Our idea is to create a center of excellence in India which would manufacture cockpit displays available for all Indian platforms.”

Kaura further adds that in the defense sector per se, the Indian government is planning to spend about Rs.4.5 lakh crore over the next five years. Another major objective of the Indian government is to create self-reliance in this sector. “That’s where we come in. In some cases, we are partnering with world-class players to bring in the technology, then localize it. In some cases we are doing it ourselves, like we did with the Sukhoi. But as we move forward, there is a lot of potential for growth in the coming years,” says Kaura.

SDS also entered into another JV with Thales Aerospace in 2008. The sixth-largest aerospace and defense company in the world, Thales Aerospace holds a 26 percent stake in the JV. The major focus of this JV lies on developing helmet-mounted displays and other avionic systems for fighter aircraft. “We are venturing into some high-end sensors that the Indian government is looking for. We are also interested in venturing into full cockpit suites and avionic suites.”
He is first focused on the Thales joint venture to sell in India and then exploring opportunities globally. He hopes to start production next year.

SDS currently accounts for about 10 percent of the group’s turnover, and Kaura has ambitious plans to take it to 50 percent in the next five years. But how exactly is he proposing to do this? “The Indian defense market is growing. We have some of the best partners in the world to bring technology into the country. And then there are offsets which will encourage a lot of global players to buy back from India. And when all that is combined, my goal seems very reasonable,” explains the young entrepreneur.

But what about the new defense procurement policy? “In defense, the offset ranges between 30 percent to 50 percent on the deal. It’s known that we are partners with the Mirage 2000 upgrade with Thales, we are partners with many U.S. pursuits like the P8, the Boeing, some programs with Lockheed Martin etc. So, some global majors are already tying up with us for different pursuits and we are now engaged in defining the work scope. As these programs unfold, the work will start. Some of it will kickstart this year and some of it will come in next year,” explains Kaura.

The product lines that this entrepreneur is expecting to work on include displays and some other defense avionic products. The next step for him is to go beyond just LRU’s to do a full system manufacturing.

Through strong partnerships worldwide, SDS has built a robust long-term growth plan. In the pipeline are plans to upgrade displays in Airbus 320, 330 and 340 aircraft and with its recent partnership with SAAB Avitronics, Kaura is also eyeing manufacturing Head Up displays. He hopes to touch the Rs.500 crore mark by 2016.

He has already diversified into military and navy products. Another area he’s interested is certain technologies that he is developing in defense which can be utilized for commercial usage as well.

With the U.S. and the U.K. being the biggest markets for aerospace industries, Kaura is now planning to expand majorly into the U.S. market. “Our idea is to provide some technologies we can manufacture here locally, hopefully more competitively than the global majors that are already supplying them in the U.S. markets,” says Kaura.

There have been a number of challenges that Kaura has faced over the years. “This industry is different in the sense it needs a lot of patience. The turnover took five years to come, it does not happen overnight. It takes time to mature a product, mature processes, mature your project management, to start delivering to the aerospace standards which is really the epitome,” he says.

So, does he aspire to be frontrunners in the aerospace industry? “The aerospace industry is very wide. Avionics is just one part of it. I think anywhere between 25 percent to 35 percent of the value of an aircraft is avionics. And we are really working on that space right now. Engines and mainframe are not what we are interested in. We are expanding the product portfolio. We are expanding the depth of our technology which is the main focus for us. And once we do that, a very large portion of that 35 percent of an aircraft can be captured by us,” signs off Kaura.

©Entrepreneur June 2011

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aircraft, avitronics, Bentley college, boeing, defense research and development organization, kaura, p8, Puneet Kaura, Saab, Samtel Display Systems, Samtel Electron Devices, Samtel Group, SDS