Wheels India Q4 net at Rs 7 cr

Figure is not comparable with Last year's profit of Rs 11 cr due to one-time tax provision

Wheels India Ltd, part of TVS Group, has registered a net profit of Rs 7.05 crore for the quarter ended March 31, 2012. The company posted a net profit of Rs 11.29 crore during the same period the previous fiscal. However, the company said that the net profit for the period is not comparable, since there was a one-time provisioning on the tax front.

The total income increased 21.95% to at Rs 578.37 crore during the quarter under review, from Rs 474.26 crore for the corresponding period last year.

For the fiscal year 2011-12, the company has posted a growth of 39% to Rs 34.35 crore as against Rs 24.64 crore registered in the previous year.

The growth in the fiscal year was fueled by the construction and mining equipment business along with exports, said Srivats Ram, managing director, Wheels India. The company is planning to invest around Rs 80 in the current fiscal year mainly to increase this segment. It is planning to raise funds through a mix of both debt and equity internally.

Looking forward, he said that the company expects the growth prospects in tractor and truck segments are a cause for concern.

“However, we are on a number of the new models in the passenger car segment and we are hopeful of achieving a reasonable growth in this segment. Our focus on exports will continue and we expect the export business to remain healthy. Overall, we think that this will be a year of consolidation for us,” said Ram.

Around 80% of the company's business comes from the domestic Indian market, the company exports wheels for off-road construction equipments and agricultural applications to Japan, Korea, US, Brazil, Belgium, South Africa, China and Indonesia.

Almost one third of it’s revenue is from wheels for the commercial vehicle segment, about 20% each from the passenger car and agricultural tractor segment, 15% from the construction equipment and mining industry and 5% from air suspension systems.

The company has about 50% market share in the commercial vehicle segment, close to 45% market share in the passenger car segment and around 60% in the agricultural tractors segment in India.

The company, which serves to mining and construction original equipment manufacturers (OEMs) sees the demand for mining trucks wheels increasing especially given the demand for thermal coal from Indian and China and the need for mining trucks to evacuate this. It also services manufacturers in India who exports mining trucks. The company has 20% market share in the global mining and construction wheel segment, added the company.