TVS Srichakra jumped 5.77% to Rs 1710 after the company announced its planned capital expenditure of Rs 1,000 crore to ramp up manufacturing in its Madurai and Pantnagar plants.
The company said that the investment is planned over a three-year period. The investment, when fully made, will result in an increase in 2-wheeler & 3-wheeler tyre capacity by 25-30% and doubling of off-highway tyre capacity from current levels. The investment is planned to be funded by a mix of debt and internal accruals.
TVS Srichakra is India's leading 2 & 3-wheeler tyre manufacturer. The company supplies tyres to most two and three wheeler manufacturers that operate in India, besides holding a significant presence in the domestic after market. The company is also a leading exporter of 2 & 3 wheeler tyres.
The expansion program being undertaken will focus on setting up additional capacities in this space to cater to growing demand across its customer base - both domestically and globally. Included in this investment, is a plan to enhance capacities in the company's pioneering range of radial tyres and other premium products. The investment outlay will also significantly increase TVS Srichakra's capacities and technological capabilities in the off-highway tyre segment, with a clear focus on global markets.
Speaking on the investment plan, S Ravichandran, director, TVS Srichakra, said, "With a wide distribution network in India, growing international presence and building state-of-the-art capabilities in R&D and product development, we are further strengthening our manufacturing capabilities to cater to the growing demands in India and abroad. We believe that this capital outlay will enable TVS Eurogrip to further its growth aspirations and help strengthen its partnerships with vehicle manufacturers and create new benchmarks in the replacement and global markets. This investment reflects our fullest confidence in India's recovery and its prospects in the medium to long term and is our contribution to Atmanirbhar Bharat".
TVS Srichakra, makers of TVS Eurogrip brand of tyres is one of India's leading manufacturers and exporters of two, three-wheeler tyres and off-highway tyres.
The company's consolidated net profit surged 103.4% to Rs 39.85 crore on a 0.9% decline in net sales to Rs 552.38 crore in Q2 FY21 over Q2 FY20.
On a year-to-date (YTD) basis, the stock has added 4.45% while the benchmark Sensex has risen 10.45% during the same period.
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