The Hindu Business Line : Brakes India plans Rs 100-cr capex — Assembly facility may be set up in Pune

Speaking to Business Line here on Thursday, Mr S. Viji, Joint Managing Director, Brakes India, said the growth of its two divisions - brake systems and foundry - has been `significant', above 20 per cent, and he expected the trend to continue during the rest of the year.

He said the company recorded a turnover of about Rs 750 crore last year and during the current fiscal, he estimated the company to register a sales performance of about Rs 900-925 crore.

Referring to the profit expected, he said in terms of quantum, with a sales growth of more than 20 per cent, he expects some improvement in profit figure compared to the previous year. But in percentage terms of turnover, it may not be the same as last year because of the increase in the price of raw materials and due to the price reduction given to its customers.

The company recorded a pre-tax profit of about Rs 85 crore and after-tax profit of about Rs 56 crore during 2003-04.

The company is expanding its foundry capacity by nearly 30-40 per cent in one go and is hiking the capacity for braking systems - disc brakes and drum brakes - and also master cylinders substantially.

Mr Viji said the investment in foundry segment came in `big lumps' and it may account for about 40 per cent of the capex planned with the rest going to the brakes business.

The company's Pune plant would be an assembly facility to begin with, similar to the one in Gurgaon and the initial investment is estimated to be Rs 5-6 crore.

It might go on stream by June 2005 and the company wanted to be ready to face competition in the State when the VAT regime comes into force.

Answering a question as to when the full impact of the planned capex would reflect on the company's performance, he said: "progressively from next year onwards" but full utilisation may take two to three years.

The company has set up a new foundry facility in Sholinghur near its existing unit and it may begin operations by next April.

The company derives nearly 20 per cent of its turnover from exports and there is a good potential to increase exports, he said.

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