Micromax’s Sharma to lead Bhagwati Products into components by year-end

Bhagwati Products Limited (BPL), owned by Micromax co-founder Rahul Sharma, is looking to foray into electronics component manufacturing by year-end after ramping up production of smartphones, tablets, wearables, and storage devices.

The company has identified the land for component manufacturing and will soon announce its joint venture partner, Sharma said in a media interaction on Tuesday. “BPL has been working towards entering component manufacturing. We will be starting with display and expanding into mechanics,” Sharma said, adding that the plan is to focus on high-value supply-chain products.

Sharma’s component push coincides with the government seeking applications from companies for subsidies under the ₹22,919 crore electronics component manufacturing scheme. Applicable from this fiscal, the scheme will offer incentives up to 10% of turnover and up to 25% of capital expenditure in setting up facilities.

“Our foray into components manufacturing is not binding on the government’s announcement of selected applicants for incentives,” Sharma said.

BPL, which is also a beneficiary under the smartphone PLI scheme, has largely missed the opportunity to get incentives under the scheme as it could not scale up the production of Micromax phones and secure large orders from other smartphone companies. However, it was able to ramp up its production and apply for incentives in FY25 as its orders surged after Chinese original design manufacturer (ODM) Huaqin formed a joint venture with the company and acquired a 49% stake.

“All the product expertise of Huaqin will be replicated in India,” Sharma said, adding that the focus is on three different ecosystems: smartphones, personal computers (PCs) and automotive electronics.

Huaqin tie-up
BPL is also banking on Huaqin’s global customer base to transition from electronics contract manufacturing to original design manufacturing, which takes care of the complete lifecycle of electronics products from design to manufacturing, giving countries more control over value.

BPL manufactures about 2 million smartphones per month, and counts companies such as Vivo, OPPO, MiPhi, OnePlus, Lenovo, and Acer, among others, as its customers.

To support the growing order book, the company is expanding operations with a new manufacturing unit near its flagship 15 lakh sq. ft. facility in Greater Noida. Besides the existing Noida factory, the company has two other plants–at Bhiwadi, Rajasthan and Hyderabad, Telangana–to make mobile phones and televisions.

It is targeting a revenue of ₹15,000 crore in FY26 amid high demand for smartphones, tablets, TWS (true wireless stereo) devices, and storage solutions, and aims to produce 25 million units by the end of this year. In FY25, BPL’s revenue rose 10 times to ₹6,200 crore.

“Design has been a very challenging work for any electronics company. For BPL, with Huaqin as its partner, there is a high chance that the company would see scale, and the industry will also see another local ODM player after Dixon Technologies,” said Tarun Pathak, research director at Counterpoint India.

EMS with margins are as low as 2-3% compared to ODMs, which can generate an additional profit margin of 5-7%, Pathak said. The size of the EMS/ODM India market across verticals is expected to be easily over $100 billion in the next 3-4 years, he said.

Exports push
Sharma said BPL is also looking at starting exports with Motorola tablets to countries such as the US.

“In the next 3-4 years, we will have the skillset that global brands require. We will be fully equipped to build the required electronics products,” Sharma said. BPL currently has 10,000 employees. It said it will be investing close to $10 million in upskilling and hiring initiatives, with a structured knowledge transfer and upskilling program developed in partnership with Huaqin.

On whether India needs another smartphone PLI scheme, Sharma said, “We would definitely require another round of PLI, and the industry is confident that the government will come up with the same.” Smartphone PLI scheme, the most successful incentives package of all, will expire in the current financial year.

BPL has plans to increase its focus on research and development and foray into products such as AI servers and augmented reality/virtual reality, including smart glasses, among others. LiveMint