Wheels India earmarks Rs 72 cr as capex

For the Q2 ended September 30, 2020, it had posted a net profit of Rs 7.43 cr against Rs 28.67 cr for the same quarter in the previous year. But the company said the numbers are not strictly comparable as the net profit of Q2 of the previous year had a one-time write back of a deferred tax liability of Rs19.80 cr.

The company’s revenues touched Rs 510.84 cr for the Q2 ended September 30, 2020 while it recorded revenues of Rs 595.63 crores in the same period last year. “Reduction in turnover in the first half of the years was due to a large part of Q1 being a washout. By September, we had reached 90% of pre-COVID turnover which is a significant improvement. Customers have been placing robust orders with us. We have to see if demand continues post the festival season. We hope the momentum will carry into next year. The mood is of cautious optimism,” said Srivats Ram, MD, Wheels India.

Earlier this week, it began production at a newly-commissioned cast aluminium wheel plant at Thervoy Kandigai. The plant has an annual capacity of 7.5 lakh wheels. “We will start shipping the cast aluminium wheels shortly. Initially, it will be exports but will look at the domestic market as well going forward. We have invested Rs 177cr into this project,” he said.

The company exports around 20% of its sales and has a diversified customer base with over 40 customers globally. “We are building new order in exports, which should reflect in growth next year. There is also some benefit we have got out of global customers’ realignment strategy,” he added.

Noting that 20% of revenues in H1 were from industrial components segment with significant contributions from railways and the windmill segment, Ram said “we saw a sharp demand in the windmill segment even during the lockdown. We expect the growth to continue into the second half of the year.”

On the outlook for the H2 of the year, Ram said, “There has been some build-up of demand towards the festival season, in most segments barring the CV segment. The current momentum that we are seeing augurs well and should build into growth in FY22.”