Wheels India Q4 net rises 9% at ₹27.8 crore, revenue climbs 29%

Chennai

Steel wheels maker Wheels India Ltd. reported a 9% rise in net profit to ₹ 27.8 crore for the fourth quarter ended March 31 compared with a year earlier. Revenue grew 29% to ₹1,101.3 crore.

The company recorded net profit of ₹79.8 crore for the year ended March 31 compared with ₹6.7 crore in the previous year. Revenue climbed 67% to ₹3,686.7 crore.

The board of the company recommended a dividend of ₹8.30 per share.

The company said that for the first time, exports had crossed the ₹1,000 crore in a year. Contribution of exports rose to 27% of sales in the year recently ended, compared with about 16% a little more than five years ago.

In FY21, the company had begun production of cast aluminum wheels from its plant in Thervoy Kandigai near Chennai. Earlier this month, the company inaugurated a new plant for machining of large wind turbine castings in the same area.

“We expect the positive trend in the commercial vehicles segment seen in Q4 of FY22 to continue this year, benefitting both our wheels and suspension business,” said managing director Srivats Ram. “While the demand outlook is positive, there continues to be industrial inflation. The positive trend of export growth is likely to continue this year,” he added.

He said the company would be investing ₹155 crore this year in capital expenditure, part of which would go into the expansion of the construction equipment business and the aluminum wheels unit. The company had earlier invested ₹75 crore in the new plant for machining of large wind turbine castings. This year, it will invest an additional Rs. 25 crore in that plant.

“We are investing because we are seeing clear opportunities and there is customer demand on hand,” said Mr. Ram.

“We have benefitted from China derisking strategy of global companies with the cast aluminum business being an opportunity arising out of that. But we are also expanding business with existing customers.”

On exports, he said that there was strong demand from Japan, Korea, Europe and North America.

He said that with the exit of the joint venture partner two years ago, the restrictions on expanding into segments and geographies have been removed and that the company had been aggressively foraying into newer segments and geographies that it could not earlier.

“he fact that we have invested well over ₹150 crore in the cast aluminium plant in the last year or two and our current investment of ₹100 crore in the new plant… shows that we are making large investments and are optimistic about growth in these new areas from zero base,” he pointed out.

On the CV segment, Mr. Ram said that HCVs had been ‘very strong’ in FY22 with demand for multi-axle vehicles rising. The LCV segment too had been showing strong demand, he said, adding that that the momentum in CVs was ‘back’. He added that the expected the overall CV segment to be ‘strong’ this year.

Wheels India is a manufacturer of wheels for trucks, buses, agricultural tractors, cars and utility vehicles representing a little more than 50% of the company sales, with the balance coming from wheels and structures for construction equipment; air suspension systems for trucks and buses; and components for windmills and railway bogies with manufacturing plants at Tamil Nadu, Maharashtra, Uttar Pradesh and Uttarakhand.