Wheels India registered a net profit of ₹22.7 crore for the quarter ended September 2018, down from ₹26.4 crore a year earlier. Revenue grew 32% to ₹795.8 crore from ₹604.8 crore in the corresponding period of the previous year.
The net profit for the corresponding year-earlier period included an exceptional profit of ₹10 crore from the slump sale of its passenger car steel wheel business to its subsidiary WIL Car Wheels Ltd. Removing the one-off item would mean a growth of 38.4% in net profit for the quarter ended September 2018.
Addressing the media, Srivats Ram, managing director, Wheels India, said, “We have seen growth across the board in the first half of this year, as most industry sub-segments of our business are in the up-cycle.”
He added that the commercial vehicles segment had seen ‘quite a strong’ performance due to infrastructure development being seen in the country.
Mr. Ram also highlighted the impact of ‘industrial inflation, which has been much stronger than seen in 5-6 years.’
“Inflation and ramping up of capacities are a challenge. We should complete all our planned capacity expansion by the end of this calendar [year],” he said.
On the outlook, he pointed out that some segments such as the passenger vehicles segment had seen a slowdown. On inflation, he said, “We have faced challenges from inflation — fuel prices have risen.” The depreciating rupee over the past couple of months had, in turn, made cost of inputs such as aluminium and steel higher, he added. On the outlook, he said, “there is still a certain sense of optimism. I will say the outlook is one of guarded optimism.”
He said that the company had not foreseen the current growth and was rushing to complete brownfield projects worth ₹122 crore for which board approval had been given in April this year. “A significant portion of that will be completed by December this year. It will be a question of ramping up then. So, the January quarter will see an improvement in sales,” he said.
The company also saw ‘significant double-digit’ growth in exports, he added.
To a question, he said that the company had not invested much in capacity expansion in the last 3-4 years. “We are playing catching up now. We are setting up a couple of lower investment value smaller plants in Tamil Nadu.” This related to additional business “we have garnered,” he added.
