Tenneco Clean Air India Explores M&A and Diversification Beyond Automotive Sector

Auto component maker Tenneco Clean Air India is looking at potential acquisitions to expand into industrial markets such as rail, aerospace, and defence. Backed by a zero-debt balance sheet and strong cash generation, the company is also focusing on powertrain-agnostic automotive products.

Tenneco Clean Air India is exploring opportunities for mergers and acquisitions as the auto component manufacturer looks to broaden its business beyond the traditional automotive sector, according to Chief Executive Officer Arvind Chandra.

The company is considering options across industrial markets, including rail, aerospace, and defence. At the same time, it aims to expand its automotive offerings to include powertrain-agnostic products capable of supporting internal combustion engines, hybrids, and electric vehicles.

In an interaction with PTI, Chandra stated that the company is looking at both related and unrelated diversification through inorganic M&A opportunities. Target companies are expected to feature strong technology, decent margins, a distinct market position, and an underlying India growth strategy.

Driving this diversification is the historically cyclical nature of automotive markets. Exploring inorganic growth allows the company to enter faster-growing areas more rapidly. Chandra noted that Tenneco's zero-debt status and strong cash generation from its balance sheet provide the financial capacity to pursue a sizeable acquisition.

Alongside its diversification plans, Tenneco is expanding its core automotive portfolio across vehicle powertrains. The company reported a strong order book of ₹16,500 crore, up from approximately ₹12,000 crore in the previous quarter. New business typically requires 12 to 18 months to enter production, followed by a subsequent ramp-up phase.

Suspension products currently account for about 65 per cent of the company's outstanding order book, driven by rising demand for premium suspension systems and semi-active technology in the Indian market. Consequently, Tenneco's revenue mix has shifted slightly, with suspension now contributing 51 per cent and clean air and powertrain products making up the remaining 49 per cent.

"Tenneco's strategy highlights a pragmatic approach to managing cyclical market risks. By leveraging a zero-debt balance sheet and strong cash reserves for inorganic expansion into sectors like rail, aerospace, and defence, the company is building long-term resilience. For businesses operating in traditional sectors, diversifying revenue streams while strengthening core product portfolios is a sound blueprint for sustainable growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes