Wheels India proposes a capex of ₹200 crore for the current fiscal as the company seeks to ramp up capacity in certain segments in view of bright growth prospects.

The capex will be higher than the ₹143 crore it spent during FY23. “This year’s capex is backed up by strong orders and we need to do some bottlenecking to increase the capacity,” Srivats Ram, Managing Director of the company, said while discussing the company’s FY23 performance.

The capex will be spent to boost the capacity to serve orders in commercial vehicle, tractor, aluminum wheel and windmill machining categories.

Financials

The company’s net profit for the last fiscal came in at ₹65 crore compared with ₹80 crore in FY22, amid challenging market conditions. Its revenue grew 18 per cent at ₹4,332 crore (₹3,687 crore).

For the quarter ended March 31, it reported a net profit of ₹25 crore (₹₹28 crore in the year-ago quarter). Revenue increased 6 per cent at ₹1,169 crore as against ₹1,101 crore.

The board has also recommended a final dividend of ₹3.97 per share for FY23. The company had, in January, declared an interim dividend of ₹3 per share for FY23.

Wheels India saw a significant growth in the air suspension business (which supplies to buses) last fiscal, due to the reopening of schools, colleges and offices. Both the segments — State Transport Undertakings (STUs) and private — reported quite an active business.

Air suspension has reached close to 10 per cent (about ₹421 crore) of the company’s overall revenue and remains strong. The windmill business is expected to record strong growth going forward. Also, the commercial vehicle and earth mover wheel businesses did well in FY23.

Exports hit

On the negative side, the company’s exports were badly affected but returned to normalcy in Q4“Despite talks of global uncertainty, exports are looking positive for us due to two reasons. We are building on the existing relationships we have with customers and getting into new platforms. We should see some growth on the export side during the current fiscal. Overall, last year was difficult for us. But this year looks reasonably promising starting with exports,” said Ram.

In the domestic market, the company made reasonable inroads in the aftermarket segment and the business now contributes close to 5 per cent of overall business. “It is the first time it has reached such a level,” he added.

“There is a certain amount of positivity in the domestic market. CV was quite strong in Q4 and we are continuing to see some momentum this year. Government investment in infra should give a fillip in this segment,” he said.

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