Chennai-based Wheels India Ltd has a capital expenditure (Capex) plan of Rs 155 crore for the current financial year. Part of it will be used to expand the construction equipment and aluminium wheel business. The company has invested Rs 750 crore in a new plant in Thervoy Kandigai, Tamilnadu, to process large wind turbine castings. This year, the company will invest an additional Rs 250 crore in the plant.

“We are investing because we see a clear opportunity and we have customer demand on hand,” said Srivats Ram, managing director of Wheels India. Wheels India can apply for term loans to meet its funding needs, he said. However, he was quick to add that the number of term loans was not important.

Ram said that Indian Wheels has benefited from the global company’s “China de-risking strategy”, and the aluminium casting business is an opportunity arising from this. “But we are also expanding our business with existing customers,” he added.

On export markets, Ram said demand was strong in Japan, South Korea, Europe and North America. With the exit of the joint venture partnership two years ago, restrictions on expansion into segments and regions have been lifted, he said. He added that the company has been aggressively expanding into new areas and geographies that were previously inaccessible.

“We have invested over Rs 150 crore in aluminium foundries in the last year or two and we are currently investing Rs 100 crore in new plants to process large wind turbine castings, which shows that we are investing heavily and we are entering” these new fields are starting from scratch,” Ram said.

In the commercial vehicle (CV) segment, heavy commercial vehicle (HCV) has been very strong in FY22 with increasing demand for multi-axles, he said. The light commercial vehicle (LCV) segment also showed strong demand. The recovery momentum is back, he said. He expects the overall resume section to be strong this year.

However, he acknowledged that China’s zero-covid policy has created some uncertainty. Still, he sees some opportunities. While rising inflation has affected consumer goods, he believes government-provided infrastructure will have a positive impact on demand for industrial products. Ram is eyeing growth opportunities and has hinted at increased hiring this fiscal year.

Meanwhile, Wheels India’s net profit rose 9 per cent to Rs 2.78 crore in Q4 ended March 2022, compared to Rs 2.55 crore in the same period last year. Revenue rose 29 per cent to Rs 1,101.3 crore in the fourth quarter ended March 2022, compared to Rs 852 crore in the same period last year.

In FY21, Wheels India started producing cast aluminium wheels at its Thervoy Kandigai plant near Chennai. Earlier this month, the company opened a new factory in Thervoy Kandigai for processing large wind turbine castings.

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The fourth quarter of fiscal 2022 will continue this year, benefiting our wheel and suspension business. Despite the positive demand outlook, industrial inflation has continued. The positive trend in export growth this year is likely to continue. “