Wheels India continues to leverage growth through exports

Wheels India Ltd. has reported a 12 per cent increase in net profit at Rs. 17.32 crores in the first half year ended September 30, 2014 from Rs. 15.51 crores achieved in the corresponding period last year. Revenues for the first half year went up nine per cent to Rs. 1,006 crores as compared to Rs. 922 crores registered in the corresponding period last year.

Net profit for Q2 increased nine per cent to Rs. 9.51 crores from Rs. 8.73 crores achieved in the corresponding period last year. Revenues increased 10 per cent to Rs. 516 crores as compared to Rs. 469 crores registered in the same period last year.

Commenting on the scenario in the first half, Mr. Srivats Ram, Managing Director, Wheels India Ltd., said: “The first half saw some improvement in the CV market off a low base and decent growth in export markets. Our cost control initiatives and better efficiency across our plants contributed to the growth in profits.”

On the outlook for the second half of the year, he said: “While we continue to see growth in export markets, we are cautious about the prospects of major segments in the domestic market. We hope that the second half of the year will be similar to the first half, with the fourth quarter making up for a sluggish third quarter.”

Exports contribute to just over 20 per cent of the revenues. The company will continue to leverage on its strong presence in select overseas markets and will aim at increasing its contribution from exports.

On the potential in the air suspension segment, Mr. Srivats Ram said: “We are seeing some growth in this area with offtake from State transport undertakings. We believe there is potential for us to expand our presence in this segment both in terms of breadth of product and new geographies, going forward.”

Over 50 per cent of Wheels India’s revenue comes from wheels for CVs and passenger cars, with the rest coming from the agricultural tractor, construction equipment, mining industry and air suspension systems.

Wheels India is a leading manufacturer of steel wheels for passenger cars, utility vehicles, trucks, buses, agricultural tractors and construction equipment. It has manufacturing plants at Padi, Pune, Rampur, Bawal, Sriperambudur and Pantnagar with a combined overall annual capacity of 16 million wheels.

The company has a diversified customer base with over 30 customers globally. While about 80 per cent of the company’s business comes from the domestic market, it exports wheels for off-road construction equipments and agricultural applications to Japan, Korea, the US, Brazil, Belgium, South Africa, China and Indonesia.