TVS Srichakra doubles net profit

Plans a capex of Rs.150 crore to ramp up capacities at Madurai and Rudrapur factories.

TVS Srichakra Ltd. has more than doubled its net profit for the year 2014-15. For the first time, the two- and three-wheeler tyre maker’s annual net profit has crossed Rs.100 crore.

For the year ended March 31, 2015, the company’s net profit zoomed to Rs.104 crore from Rs.47 crore in the previous year. EBITDA (earnings before interest, taxes, depreciation and amortisation) was higher by 72 per cent at Rs.206 crore as against Rs.120 crore. EBITDA margins stood at 11 per cent. “Softening of raw material prices, strong top-line growth, robust after-market sales and lower interest costs, among others, helped achieve strong bottom line growth,” said P.Vijayaraghavan, Director of the company

Its total revenue for the year stood at Rs.1896 crore as against Rs.1671 crore, a growth of 13 per cent. Mr. Vijayaraghavan said the company was commanding highest market share in the 36-million unit two-wheeler tyre market in the country.

For the 4th quarter ended March 31, 2015, the company’s net profit grew by 55 per cent to Rs.34 crore from Rs.22 crore in the year-ago period. Total revenue stood at Rs.465 crore as against Rs.457 crore.

Double digit growth

Amid challenging outlook for the two-wheeler market this fiscal, TVS Srichakra is confident of maintaining the growth momentum this fiscal too. “The two wheeler market is forecast to grow at 7-8 per cent in 2015-16, said Mr. Vijayaraghavan adding, “But, we hope to close this year also with double digit growth.” After a new brand identity and promotional campaigns, the company claimed to have boosted its business in the after market segment, which is expected to be a major contributor of growth for the company.

In line with the demand outlook, the company is also proposing to spend about Rs.150 crore in capacity expansion programme, which will see it ramping up its overall tyre capacity from 2 million tyres a month to 2.3 million tyres by December this year. This expansion will be taken up at its Madurai and Rudrapur plants.

Meanwhile, the company is also gearing up to supply tractor radial tyres for the European market. And, it also hopeful of adding the U.S. market too in this export category. It is also preparing to be a supplier for the TVS Motor-BMW joint venture, which will roll out new super bikes next year.