Hinduja Foundries, which was referred to the Board for Industrial and Financial Reconstruction (BIFR) last year, has said the company is set to achieve cash break-even by the end of March 2014.
The foundry arm of the Hinduja group was referred to BIFR after the company's accumulated loss rose to Rs 291 crore as on September 30, 2012, 50 per cent of its net worth. However, the promoters, including Ashok Leyland, the flagship company of the Hinduja group, said it was not in their intention to push the company to sickness, and then, committed to infuse Rs 300 crore.
Hinduja Foundries, the largest casting manufacturer in India, mainly operates in the grey iron segment, which is a niche segment of cylinder blocks and heads. The company has an order book of nearly 112,000 million tonnes (mt) for 2013-14.
The company's networth in 2012-13 (six months) stood at Rs 307.32 crore, compared with Rs 185.18 crore in 2011-12 (18 months) and Rs 408.52 crore, a year ago.
"The year gone-by was consistently beleaguered by many challenges in the form of quality concerns, high power cost owing to power cuts and power holidays in both Andhra Pradesh and Tamil Nadu market slump affecting the top line," the company's annual report for 2012-13 said.
Hinduja Foundries achieved a gross production of 42,100 mt in the six-month period October 2012 to March 2013, in comparison with 47,502 mt during the previous six months. Sales during the period October-March 2013 stood was at 40,052 mt.
The loss of business in the commercial vehicle segment on account of adverse market conditions was partly made up by increased business with tractor manufacturers.
"The company's performance in 2012-13 was mainly affected by the market slowdown. Though the company recorded reasonable output and sales under the given circumstances, it could not brave all the challenges of materials and power costs," stated the report.
The company further said it consolidated its position as a principal supplier of castings to various original equipment manufacturers (OEMs), including Tata Cummins, Renault, New Holland and John Deere. Necessary infrastructure and tooling had been put in place and technical knowhow had been developed to become supplier of choice to all major OEMs.
The company continued to face numerous challenges due to negative growth of the OEM market, uncertain power scenario and a sharp increase in raw material and power prices, which were not adequately compensated by the customers.
The Sriperumbudur unit ramp-up is proceeding at a rapid pace with de-bottlenecking of capacity constrains and stabilisation of production processes.