Wheels India inks technology pact with EGE of Turkey

Company reported a lower net profit in 2012-13

Srivats Ram, Managing Director, Wheels India, addressing a press conference in Chennai on Monday. Photo: Bijoy Ghosh

Wheels India Ltd., a part of the TVS Group, has reported a lower net profit for the year ended March 31, 2013, at Rs.31.88 crore against Rs.34.55 crore in the preceding year. Revenues, too, were lower at Rs.1,927 crore against Rs.2,080 crore.

For the quarter ended March 2013, it reported a profit after tax of Rs.5.35 crore (Rs.7.95 crore). The revenue for the quarter stood at Rs.469 crore, down from Rs.578 crore in the same quarter in the previous year.

The board of directors has recommended a dividend of Rs.8.10 per share for 2012-13.

Addressing a press conference here Srivats Ram, Managing Director, said the second-half of last year was a ‘dampener’ especially in the wake of ‘quite a significant’ slowdown in the construction and mining sectors. While the medium and heavy commercial vehicle markets were down badly, the tractor market was negative. All these had reflected in the sales of Wheels India, he pointed out.

Answering a range of questions, he said, “We have very muted expectations on what will happen going forward”. To a query, he said the company did well on the export front in the first-half. In the second-half, it had done better than it had anticipated, he added.

Exports, which comprised 18 per cent of the company’s revenue, grew by 7 per cent last year, Mr. Ram said.

He said the big push given by the Central Government to the thermal power projects and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was a big positive, especially since Wheels India was producing air suspensions and doing fabrication for thermal power plants.

Given the uncertainty, he said, it would be difficult to talk about any fresh investments. The focus at present was more on conservation of cash, reduction of cost, and cutting down on stocks. Mr. Ram also informed presspersons that Wheels India had inked a 10-year technical pact with EGE Endustri of Turkey. The agreement with the Turkish firm, he said, would help Wheels India gain technology access in the lift axle market.

He said the lift axle market was a large segment in India, much bigger than the bus segment. “We will be developing the products for OEMs (original equipment manufacturers). And, the full roll out of this business is expected next year,” he added.