Less than a week after the Hinduja Group flagship company, Ashok Leyland, announced a three-day week at its plants to align supply with sales, another group company Hinduja Foundries today said it has decided to restrict production at its three plants in the country.

Hinduja Foundries, one of the largest castings suppliers to auto component manufacturers, will suspend production for five days in a month. While the Ennore and Sriperembudur plants will follow this new production schedule till March 2009, the Hyderabad unit hopes to return to normal production by January 2009.

As part of its crisis management plan, Tamil Nadu Electricity Board (TNEB) has imposed severe restrictions on manufacturing units with regard to the number of hours they can operate in a day. "This policy is not conducive for a unit like Hinduja Foundries," said V Shankar, chief financial officer, Hinduja Foundries.

There is an estimated 1,000-1,500 MW of power shortage in Tamil Nadu, which forced the state to impose a new set of restriction on industrial units recently.

Hinduja Foundries proposes to implement its new production schedule by November last week at the Sriperembudur and Ennore units, while Hyderabad will adopt the new schedule with immediate effect.

Shankar said that the new schedule will definitely have an impact on the company’s third quarter results, but was unable to quantify it.

The company's net profit during the second quarter ended September 30 dropped by 77 per cent to Rs 1.07 crore from Rs 4.68 crore in the corresponding period last year. Net sales, however, increased by 8 per cent to Rs 119.85 crore during the quarter. The company’s stock price on BSE fell nearly 3 per cent to close at Rs 83.50 today.

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