Wheels India, a TVS Group company, has reported a 39 per cent increase in its net profit to Rs.34.35 crore for the year ended March 31, 2012, up from Rs.24.64 crore in the preceding year. The revenue has risen by 22 per cent to Rs.2,078 crore (Rs.1,701 crore).
The board of directors has recommended a final dividend of Rs.6 per share for 2011-12. With the interim dividend of Rs.4 per share already paid in March 2012, the total dividend for the year comes to Rs.10 per share (Rs.6.50 per share paid in 2010-11).
Addressing a press conference here on Wednesday, Srivats Ram, Managing Director, said the focus of the company this year would be mostly on cost management. He insisted that this would happen across product segments. In this context, he indicated that Wheels India would seriously look into ‘plant-related profitability'. As a consequence, product lines could also move from one plant to another. The objective was to re-align the cost, so as to bring about optimisation in logistics cost, he added.
Fielding a range of questions, Mr. Ram said, “this year will be a year of consolidation for us. We don't see ourselves entering dramatically into new areas.” To a question, he said around 7 per cent of the revenue came from non-wheel businesses such as air suspension systems, boiler structures et al. Mr. Ram said the company had drawn up a Rs.80-crore capital expenditure programme for the current year, going mainly into construction and mining space, and new model passenger cars.
He said the technical pact with Topy Industries of Japan had brought about a lot of comfort in terms of product development. Also, “it has brought about process-related improvements,” he added.
The company, he said, commanded a 50 per cent market share in the commercial vehicle space, close to 45 per cent in the passenger car segment and around 60 per cent in agricultural tractor. One-third of the revenue came from wheels for the commercial vehicle segment and 20 per cent each from passenger cars and tractors. The construction and mining space contributed 15 per cent of the revenue. About 5 per cent of revenue came from air suspension systems, he added.
Over 80 per cent of the company's business came from the domestic market, he said. Wheels India, however, was present in six continents selling wheels for off-road construction equipment and farm applications, he pointed out.
On the outlook for the current year, he said “the slowdown is a cause for concern.” He expected growth concerns in tractor and truck segments. “Since we are on a number of new models in the passenger car segment, we are hopeful of achieving a reasonable growth in that segment,” he said. He anticipated the “export business to remain healthy.”