Coimbatore, March 23
SONA Koyo Steering Systems Ltd (SKSSL) is on course to achieve sales turnover of Rs 350 crore during the current fiscal, but a more challenging target of Rs 425-450 crore has been set for the next fiscal, according to the company's Chairman and Managing Director, Dr Surinder Kapur.
He expects the acquisition of a 21 per cent equity stake in a French company will help increase export income.
Speaking to Business Line, Dr Surinder Kapur said he was confident that SKSSL, which primarily manufactures steering systems and driveline products for cars and utility vehicles, would achieve a gross sales turnover of around Rs 350 crore compared to Rs 287 crore sales in the previous year. The export turnover would be Rs 25 crore during this year compared to Rs 5 crore in the previous year. The original export target was Rs 30 crore but because of the surge in domestic demand faced by many of its suppliers, it could not be met.
He said the company was looking at `more challenging targets' during next year with sales moving closer to Rs 425-450 crore, and with exports touching at least Rs 50-60 crore. A team from France would visit India next month to decide on purchases from India.
He said while the benefit of the stake pick up by Sona Koyo in Fuji Autotech of France would be felt next year itself, the full impact would be visible in 2006-07. SKSSL wanted to increase its export sales to Rs 100 crore by 2007 and this would be part of that goal. Dr Surinder Kapur said the company's board had earlier approved a capital expenditure of about Rs 120 crore over a two-and-a-half year period. During this year, about Rs 50 crore was spent and during next year, the balance Rs 70 crore would be invested in plant and machinery. Asked whether the PAT of Rs 12.1 crore when compared to the turnover of Rs 287 crore recorded last year was not low, the Sona Koyo CMD said that in the last two to three years, there was continuous increase in steel price, all of which the company was not able to pass on to customers. The margins have come under pressure and prices have not been increased. The company was able to cut costs but at times it could not keep pace with the increase in price of raw materials.