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Wheels India plans a capex of ₹225 crore for the current fiscal year. The leading auto parts maker seeks to ramp up capacity in some product segments to support emerging demand.
The proposed capex is expected to be spent on machining large castings, aluminium wheels, earthmoving wheels, tractor wheels, and hydraulic cylinders, among other things.
The production capacity of aluminium wheels will be ramped up from 25,000 wheels a month now to 40,000 wheels a month this year, S Ram, Chairman of Wheels India, said while addressing the 65th Annual General Meeting of the company through video conference mode.
The business supplying wheels to the construction equipment industry saw reasonable growth in FY24 with an increase in volumes with most customers.
He said that after the merger of Sundaram Hydraulics Ltd with Wheels India in FY24, the hydraulic cylinder business has grown reasonably and become profitable. This business is expected to show good growth going forward.
Discussing the non-auto business, Ram said: “While the demand for windmill components was muted in FY24, we could ramp up production at our plant machining large windmill castings. The plant is now a profitable business that we hope to grow, ramping up in line with our casting partner.
The business supplying wheels to the construction equipment industry saw reasonable growth in FY24, with increased volumes for most customers.
The ₹4,619 crore company’s export business grew considerably in FY24, up 24.5 per cent, driven by the export of earthmover wheels and aluminium wheels. Wheels India has incorporated a subsidiary in the US and intends to form a subsidiary in Europe as well to give further thrust to the business development in these geographies in line with the company’s commitment to growing the export business.
New export opportunities with major global tractor manufacturers are also expected to benefit the company in the coming years.
Managing Director Srivats Ram responded to a shareholder’s question, indicating that the bottom line should improve in FY25 due to the company’s diversified product mix and strategic efforts. “The mix of products should help us improve and sustain the profit,” he said.
The company’s annual report for FY24 said the commercial vehicle market is expected to be flat in FY25. However, bus demand is expected to remain at decent levels.
In the cast aluminum business, while the company started supplying to vehicle manufacturers, the volumes were muted. It hopes to start supplies to a large Indian vehicle manufacturer this fiscal that should help it get closer to breakeven volumes for the plant, it stated.
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