TVS Group’s auto parts company Wheels India Ltd (WIL) has hinted at a resumption of capex cycle as the capacity constraints emerge after a long gap.

Announcing its performance for the second quarter of this fiscal, the company said that it has been facing the issue of capacity constraints for the past six-seven years.

“Demand is not an issue at the moment. Meeting the demand is more of an issue now. While some debottlenecking is being done, we are bringing forward some of the capex plans,” Srivats Ram, Managing Director, Wheels India, said here.

The commercial vehicle segment is expected to maintain the projected growth. Passenger cars will continue to maintain the momentum driven by a few top players. Tractors are also expected to maintain the momentum with some moderation during the November-January period and the construction equipment sector is bullish on sustaining double-digit growth on the back of government’s continuing focus on infrastructure spend.

Thus, the businesses that the company serves present a favourable growth outlook. However, the wind energy component business is facing challenges.

Meanwhile, WIL Car Wheels Ltd, a 26:75 joint venture with Japan’s Topy Industries, started its business from September.

The JV, aimed at tapping opportunities in the passenger car segment both in domestic and overseas markets, has broken ground for its ₹42-crore new factory at Vanod, Gujarat, to make 1.5 million passenger car steel wheels.

Q2 profit grows

For the quarter ended September 31, 2017, the company posted a net profit of ₹26 crore against ₹12 crore in the year-ago period. Revenue for Q2 of this fiscal increased to ₹607 crore (net of GST) against ₹546 crore (net of excise duty) in the year-ago quarter.

For the first half of this fiscal, the profit increased to ₹38 crore against ₹27 crore in the same period last year. Revenues increased to ₹1,172 crore from ₹1,081 crore.

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