Wheels India Ltd, a leading auto components manufacturer, announced that it will proceed with its planned capex programme for the year, despite experiencing a slowdown in certain segments of the domestic market as well as key export regions like Europe and the US.
The company has allocated ₹225 crore for expanding machining capacities in areas such as windmill castings, agricultural wheels, cast aluminium wheels and hydraulic cylinders, driven by positive growth in its non-auto segments.
Although some investments — particularly in the commercial vehicles (CV) market — have been paused due to slower-than-expected recovery, the company continues to invest in areas with growth potential, Srivats Ram, Managing Director, Wheels India, said while discussing the Q2 performance of the company.
Net profit for the quarter surged to ₹21.92 crore, a significant rise from ₹5.24 crore during the same period last year. This profit increase occurred despite a slight dip in revenue, with Q2 sales reaching ₹1,085 crore, down from ₹1,189 crore in Q2FY23. The previous year’s Q2 was affected by one-off expenses, including pre-delivery inspection charges.
Ram attributed the profit growth to a favourable product mix, increased windmill casting machining, productivity enhancements and efficient cost-control measures.
The company faced challenges in the commercial vehicle and tractor segments, with declines recorded in both Q2 and Q1 of this fiscal year. The CV sector, in particular, is undergoing a shift from multi-axle vehicles to tractor-trailers, which has affected the company’s sales in this segment.
Export markets also posed difficulties, with slowdowns in the US and Europe markets causing schedule cuts and delays in new product launches, as customers managed high inventory levels.
The company expects a reduction in exports for the rest of the fiscal year but anticipates that new product introductions will drive growth in FY26.
On the positive side, non-automotive segments such as windmill component machining, hydraulic cylinders and cast aluminium wheels have demonstrated strong growth and profitability. In the CV sector, the bus market continues to perform well, with Wheels India maintaining its position as the leading supplier of air suspension systems for buses in India.
“There are significant export opportunities in the hydraulics business, and we are expanding to meet global demand. We supply manufacturers in Europe and North America, both as an OEM supplier and a contract manufacturer. We are confident of doubling the hydraulics business in the next 2-3 years from the current level of over ₹150 crore,” said Ram.
The company expects a recovery in CV, tractor and aluminium wheel sales in the second half of the fiscal year.
For H1 FY25, net profit stood at ₹47.29 crore, a significant rise from ₹18.46 crore in H1 FY24, though sales for H1 declined to ₹2,174 crore from ₹2,322 crore in the same period last year.