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The company is planning to invest around Rs 150 crore this year to expand its manufacturing capacity from the current 2 million tyres per month to 2.3 million tyres per month, by December 2015. The company is also looking at launching tyres for the earthmover category in future, said P Vijayaraghavan, director, TVS Srichakra Ltd.
"We are developing radial tyres for TVS-BMW joint venture. We are developing two types of tyres," he said, adding that the joint venture original equipment manufacturer (OEM) would have to say about the other details.
During 2014-15, we have increased our output from 1.7 million tyres per month to 2 million tyres per month. We are now investing in capex of around Rs 150 crore, so as to increas the overall capacity from 2 million tyres per month to 2.3 million tyres per month, which we expect to reach by December 2015."
The capacity expaision will be done in both the plans in Madurai and in Rudrapur. In 2014-15, the company manufactured 1.6 million tyres in Madurai plant and 4 lakh tyres in Rudrapur plant per month.
In off-road tyres segment, the company started production of tractor radial with focus on European market with plans to add US later. "With Two-wheeler manufacturers increasing their exports, we could also capitalise with volumes of our two-wheeler tyres going up, in South America, Africa etc," he added.
It would take at least one more year for the company to complete development of the tractor radial and it would look at earthmover tyres market later, again for exports. Almost 90 per cent of the off-road supplies are exports. Around 13 per cent of the company's sales is off-road tyres and the rest is two wheeler tyres.
While he said that the company is the number one player in the two wheeler market in the country, he refused to share the market share details. He added that the peformance of the company has improved better after it went through a rebranding almost six months back.
"We are expecting a double digit growth this year. The two wheeler market is expected to grow by seven to eight per cent," he said.
The company has posted a growth of 56.9 per cent in net profit at Rs 34.03 crore for the quarter ended March 31, 2015, as compared to a net profit of Rs 21.69 crore registered during the same quarter of previous fiscal year. The total income from operations stood at Rs 464.98 crore during the quarter, as against Rs 456.79 crore for the same quarter of previous fiscal year, an increase of 1.8 per cent.
The company has increased its topline by 13 per cent during the fiscal year and has seen higher growth in the after market sales, he added. It has also done a judicious inventory management and the interest charges down at Rs 29.89 crore, from Rs 41.56 crore during the previous fiscal year.
