TVS Group’s steel wheel manufacturing company, Wheels India Limited, has reported a net profit of Rs 7.05 crore for the fourth quarter ended March 31, 2012. Its net profit stood at Rs 11.29 crore during the same period last year.
The company, however, said that the net profit for the period was not comparable since there was a one-time provisioning on the tax front.
Total income grew 21.95 per cent to Rs 578.37 crore, as compared to Rs 474.26 crore in the corresponding quarter last year. For the full year ended March 2012, the company has posted a growth of 39 per cent to Rs 34.35 crore, as against Rs 24.64 crore in the previous year.
The growth in the fiscal year 2012 was fuelled by the construction and mining equipment business along with exports, said Srivats Ram, managing director of Wheels India.
The company is planning to invest around Rs 80 crore in the current financial year, mainly to increase this segment. It is planning to raise funds through a mix of debt and equity internally, Ram said.
Looking forward, he said, the company expected the growth prospects in the tractor and truck segments to be a cause for concern.
“However, we have a number of new models in the passenger car segment and are hopeful of achieving a reasonable growth in this segment. Our focus on exports will continue and we expect the exports business to remain healthy. Overall, we think that this will be a year of consolidation for us,” Ram said.
Around 80 per cent of the company's business comes from the domestic market. It exports wheels for off-road construction equipment and agricultural applications to Japan, Korea, the US, Brazil, Belgium, South Africa, China and Indonesia.
Almost one-third of it’s revenues is from wheels for the commercial vehicle segment, about 20 per cent each from the passenger car and agricultural tractor segments, 15 per cent from the construction equipment and mining industry and 5 per cent from air suspension systems.
The company has about 50 per cent market share in the commercial vehicle segment, close to 45 per cent market share in the passenger car segment and around 60 per cent in the agricultural tractors segment in India.
Wheels India, which serves to the mining and construction original equipment manufacturers (OEMs), sees the demand for mining trucks wheels increasing, especially given the demand for thermal coal from India and China, and the need for mining trucks to evacuate this.
It also services manufacturers in India who export mining trucks. The company has a 20 per cent market share in the global mining and construction wheel segment, the company said.
