S. Ram, Chairman, Wheels India Ltd., told the shareholders at the 64th AGM of the company conducted through Video Conferencing that the company expects to show some growth in its export business on the back of its strong relationships with global OEMs.
CV Sector
In FY23, the demand for commercial vehicles was driven by the Government’s infrastructure drive, higher utilization of fleets and replacement demand. There were also some structural changes in the sub-segments of the CV industry to align with load rating changes that happened prior to the pandemic and higher horsepower vehicles in some segments. He said that there was strong growth in the bus segment in the latter part of FY23. “This year, there is expected to be some growth in the goods segment of the CV industry and strong growth in the bus segment driven by a modernization drive by STUs and strong demand for buses for the school/office segment. This should benefit demand for Wheels India’s wheels and air suspension systems”, Ram said.
Cast Aluminium Wheels business to grow
The company will start supplying cast aluminium wheels to OEMs in the latter part of the year and ‘we expect the demand for the company’s steel and aluminium wheels to grow’.
He said that the supply of wheels and fabrications to the construction equipment industry saw strong growth in FY23 driven by both domestic and export demand. The demand is expected to grow at a more moderate level in the coming year.
Wheels India started operations at a plant machining large hub castings for the wind turbine industry near Chennai in FY23. Ram said that the plant is expected to be profitable in the coming year.
Q1 growth driven by air suspension demand and export drive
Wheels India Ltd has registered a 24.8% rise in its net profit for Q1 ended 30th June 2023 at Rs. 13.3 crores as compared to Rs. 10.7 crores registered in the corresponding quarter of the previous year. Revenues for Q1 ended 30th June 2023 went up 7% to Rs. 1,124 crores as compared to Rs. 1,053 crores registered in the same period the previous year.
Commenting on the Q1 performance, Srivats Ram, MD, Wheels India Ltd., said, “In Q1, amidst a muted domestic market, exports were strong at 25% of our sales. There was a strong demand for buses in the latter part of Q1.”
In the last week of July, the NCLT approved the merger of Sundaram Hydraulics with Wheels India. On the prospects of the hydraulic cylinder business, Srivats said, “We believe that there is a strong prospect to grow the hydraulic cylinder business with our existing customers”
Sharing his thoughts on the market outlook, he said, “We believe that the domestic wheel business should pick up post monsoon, in the second half.”