Wheels India Ltd., one of the largest manufacturers of wheels and auto components for commercial vehicles, cars, tractors and earth movers, recorded a net profit at Rs. 19.7 crores at the end of Q4, FY 2019, despite a slowdown in the domestic automotive market. The company’s revenue increased about 21 per cent to Rs. 855.1 crores from Rs. 705.1 crores in last FY. The Board has recommended a final dividend of Rs. 4.75 per share.
Net profit for the entire FY19 increased by 5.4 per cent at Rs. 75.7 crores, as compared to Rs. 71.8 crores in the previous year. The revenues came up to Rs. 3,188.8 crores, which was a 26.7 per cent rise from FY18, out of which 20 per cent was volume growth triggered due to inflation and the increase in steel prices.
Mr. Srivats Ram, Managing Director, Wheels India, said: “There was a rapid deceleration in the automotive business during the second half of the last FY. The sentiment of the market is rather low when compared to last year and space is significantly muted.”
The domestic market, which has been sober since the middle of last year, is expected to pick up and improve as infrastructure development has been taken up by the new Government.
According to Mr. Srivats, the company’s export income increased to Rs. 608 crores from Rs. 384 crores during FY18. The export market contributes 20 per cent of the company’s sales. “We expect our export sales to remain flat during the course of the next FY”, he added.
Wheels India made a capex of Rs. 144 crores during FY18, and 40 new products were released. Operations began at the two new plants in Tamil Nadu. One of them was set up to manufacture lift axles for CVs, which was opened in Mambakkam. For the upcoming FY, the company will continue to invest towards capacity growth and expansion in sales.
Asked why the company primarily prefers Tamil Nadu, Mr. Srivats said that they could not overlook the skill available there. With its headquarters in Chennai, it has also been convenient for the company to have manufacturing units within the State.
“We are cautiously optimistic about this year’s prospects. All the markets are a bit tentative at the moment, as we do not have a clear view of what will happen during the course of the year”, said Mr. Srivats on the outlook for FY20.