Wheels India hopes for a good roll in export markets .

Barring the passenger car segment, Wheels India expects muted growth from the domestic automobile market.

``We are concerned about commercial vehicles and tractors and expect a slowdown in the current year. However, we see a single digit growth in passenger cars, as we are present in a number of new models,`` said Srivats Ram, Managing Director, Wheels India.
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``Last year, the domestic auto market under inflationary pressure and high interest rates -did not see tremendous growth,`` said Ram. Continuing inflation and high power tariff will continue to haunt the industry this year too, he said.

Revenues for the financial year 2011-12 rose 22% to Rs 20.78 billion. Net profit grew 39% to Rs 343.5 million.

For the fourth quarter, revenues were Rs 5.78 billion, at a 22% growth. Net profit, however, dipped 37% to Rs 70.5 million, on the back of a high tax burden.

While exports growth last year was 34% at Rs 3.2 billion, the domestic market grew only 15%. This year too, Wheels India expects exports to be strong.

The company exports wheels for off-road construction and mining equipment to Japan, Korea, the US, Brazil, China, Indonesia and Europe. Wheels India has a 20% global share in this market.

Despite strong exports, the rupee volatility is a cause for concern, ``since we also have imports.``  ``Plus packing credit when you export is also a cost,`` said Ram. The impact of the rupee fall was 1.2% of the turnover last year.

Non-wheel businesses

Given the subdued automobile scenario, the company is placing its bets on non wheel businesses in the domestic market. Wheels India supplies air suspensions to buses. It also makes steel structural components for thermal power plants and wind mill manufacturers.

The power sector business is `profitable` in the second year of operations. Air suspensions have also done reasonably well. These are still in the nascent stage with good growth potential, said Ram.

This year, the company`s capex will be Rs 800 million. This will mainly go into exports and domestic passenger cars.

Wheels India has recommended a final dividend for the year Rs 6 (60%) per equity share of Rs 10 each. With the interim dividend of Rs 4 per share paid in March 2012, the total dividend for the year comes to Rs 10 per share.

Shares of the company gained Rs 67.95, or 9.98%, to trade at Rs 749.05. The total volume of shares traded was 503,542 at the BSE (Wednesday).

Source : myiris.com