Wheels India, a TVS group company, has drawn up a ₹122-crore capital expenditure programme for the current financial year.
“We will be investing this towards capacity expansion. After 2011-12, this is the first year when we are seeing capacity expansion in all the segments we are present in, all at the same time,” Srivats Ram, MD, told the media on Tuesday.
“It is also the first time in many years that we are seeing successive years of such strong growth. We are full on capacity, and ramping up capacity is a challenge.”
The capacity addition should be on stream in the second half of this year, he said. “The sudden pace of shift to higher tonnage [in commercial vehicles] in the second half of last year was a surprise.”
“We expect strong growth to continue in CV and construction segments. Mining is also showing signs of life, and we are positive [about] growth in this segment as well,” he added.
Wind energy prospects
He said he saw a pick-up in exports in wind energy. “The outlook is promising. Demand is quite strong. Direction towards growth is seen in all segments. The first quarter of this year is also seeing an upward trend. We are targeting double-digit growth this year. We grew exports by 10% last year, and expect exports to do well this year,” Mr. Ram said.
To a question, he said Wheels India was building bogie bolster and block for the Indian Railways. “We just started rolling out to the Indian Railways. This is a new segment for us. In 2-3 years, this segment could become a pillar of growth similar to what the wind mill segment has become for us,” Mr. Ram said.
Net profit for the quarter ended March rose 12.7% to ₹19.5 crore from a year earlier. Revenue grew 26.6% to ₹705 crore from ₹557.7 crore (net of excise duty).
“There are signs of recovery in the cyclical user segments that constitute the bulk of the company’s exports. The company exports wheels for off-road (construction, mining and agricultural) equipment tothe U.S., Japan, the U.K., South Korea and Brazil,” he said.
Wheels India registered a 23% increase in its net profit for the year ended March 2018 at ₹71.8 crore as compared to ₹58.4 crore in the year ended March 2017. Revenues (net of excise duty) for the year under review went up 14% to ₹2,469.5 crore from ₹2,176.1 crore registered in the previous year, driven largely by a demand uptake in the CVs and passenger car segments and a recovery in the overseas markets for its business segments in the second-half of the year.
The board of the company has recommended a final dividend of ₹9 per share. This, along with the interim dividend of ₹6 per share declared earlier in the year, takes the total dividend of the year to ₹15 per share.
