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Wheels India plans INR 122 crore capex as demand rises in auto, other segments

Auto News - Published on Thu, 31 May 2018

Image Source: The Hindu
The Hindu Business Line reported that Wheels India Ltd (WIL) has planned a capex of INR 122 crore for the current fiscal as TVS Group’s auto parts company has been, for the first time in the past six years, faced with capacity constraints to meet the surge in demand in both auto and non-auto segments. The proposed capex will be spent on enhancing capacity across segments.

The company expects the overall capacity to go up by 20 per cent from 10 million wheels a year, though the increase will vary from segment to segment.

Mr Srivats Ram, Managing Director, said that “We are struggling to meet the demand at the moment. From having a very low capacity utilisation level, suddenly we have moved to hitting full capacity and the present challenge is to meet the demand surge by ramping up capacity.”

The company sees robust demand both in domestic and export businesses. He said that “The domestic demand is driven by replacement demand in the commercial vehicle market, government infrastructural initiatives and pro-agriculture policies.”

On the export side, WIL expects stronger growth this fiscal due to revival of demand in segments such as construction equipment in several markets. However, raising commodity and fuel prices are likely to put pressure on costs.

For 2017-18, the company reported a 23 per cent increase in its net profit INR 71.8 crore (INR 58.4 crore 2016-17). The slump sale of its passenger car business also contributed to the growth in net profit in 2017-18.

Source :

Posted By : Rabi Wangkhem on Thu, 31 May 2018
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