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Encouraged by improved demand and profitability, infrastructure equipment maker TIL Ltd is planning fresh investments towards capacity expansion.
“We are running full capacity at Kamarhati and are looking to have a new factory at our existing land in Kharagpur,” Sumit Mazumder, Chairman and Managing Director, TIL, told BusinessLine on Monday. The Kamarhati unit, located on the suburbs of the city, produces cranes and reach stackers.
TIL reported losses in 2014-15 and 2015-16 and sold its Caterpillar dealership business in April 2016. The restructuring helped TIL to reduce the debt and focus on own manufacturing activities in collaboration with the US-based Grove Cranes, Hyster, Astec, and others.
The strategy paid off as the company came back in black with ₹121.37 crore profit after tax (PAT). Excluding the ₹130.78-crore exceptional earnings on account of sale of Caterpillar dealership business, profit before tax stands at ₹7.11 crore, on a turnover of ₹344.07 crore.
In April to June period of this fiscal, it reported a ₹2-crore net profit against a total revenue of ₹80 crore (apprx).
According to Mazumder, the proposed new unit at Kharagpur – for producing cranes and reach stackers – is at a drawing board stage with an estimated investment of ₹70 crore in the first phase. Future investments will depend on business picking up.
“This will be a modular factory, which means additions will be made depending on demand,” Mazumder said.
TIL is also in advanced talks for manufacture of other heavy infrastructure equipments which might require further investments.
Focus areasIncreased road construction activities, at present, will see TIL re-focus on making asphalt mixing plants. “We are re-focussing on our asphalt mixing plant business,” he pointed out.
The other big growth driver will be exports to markets in West Asia, Africa, Australia, South-East Asia and New Zealand.
Hyster, Grove Cranes and Astec - with which TIL has manufacturing tie-ups - will look to leverage the latter's facilities for export.
For example, Grove is testing co-branded offerings in West Asian markets. Similarly, Hyster is “seeding offerings” in South-East Asian countries, Australia and New Zealand.
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