TVS Srichakra to invest Rs 150 cr

Takes up new expansion which will take company 's capacity to 30 million tyres a year

TVS Srichakra Limited (TVSSL), part of $6.5 billion TVS Group, has lined up capex to the tune of Rs 150 crore. The company has taken up an expansion programme to increase its overall capacity to around 30 million tyres per year.

While the company did not respond to Business Standard's e-mail, the company's Executive Vice Chairman R Naresh recently told the shareholders about the capex plans.

TVSSL's manufacturing units are located at Madurai, Tamil Nadu and Pantnagar, Uttarakhand rolling out 24 million tyres per year. The company is a leading manufacturer of 2W and 3W tyres and enjoys a market share of 25% (data as of FY2011), according to analyst reports.

The company manufactures a complete range of two-wheeler and three-wheeler tyres for the domestic market. For the export market, the company manufactures industrial pneumatic tyres, farm and implement tyres, skid steer tyres, multipurpose tyres and floatation tyres among others.

In 2014-15, TVSSL has increased its capacity at Madurai, Tamil Nadu by three million tyres per year and at Rudrapur by 0.6 million tyres per year. Further expansions are planned in 2015-16 and extra capacity at Madurai has been commissioned during the first quarter of 2015-16, he said.

He added that even though the two-wheeler industry is experiencing a muted year, the company managed to grow in OEM segment by 3% year on year. Though the seasonal effect during the second quarter and beginning of third quarter will augur well for two-wheeler industry, it is estimated to have a restricted growth for rest of the year.

"Company estimates that it will again be able to achieve double digit growth on the backdrop of its leadership position in the OEM segment and increasing market share in the after-market segment," said Naresh.