Wheels India, a leading Chennai-based wheels and car component maker, announced on Wednesday that it intends to establish wholly-owned subsidiaries in the United States and Europe for business development and sales coordination, as the company envisions growth in these locations in the future.
Srivats Ram, MD, Wheels India, stated in a post-result engagement that the subsidiaries are likely to launch in December 2023 with modest teams. “The company is looking at potential new business in Europe in the first quarter of the next year and that is the reason for having people on the ground,” he went on to say. He stated that the expansion in the US and Europe will be in the off-load sector in the construction and agro tractor industries.
The company reported a net profit of Rs 5.24 crore during the July-September quarter, compared to Rs 14.53 crore in the previous year’s similar quarter. One-time expenses, most notably a one-time charge for pre-delivery inspection fees, reduced the company’s earnings. Revenue increased 7.7% to Rs 1,189 crore from Rs 1,104 crore in the previous quarter. “The revenue growth was driven by exports with growth in Asian markets offsetting the slowdown in Europe,” he said.
Wheels India spent Rs 72 crore on capital expenditure in the first half of the fiscal year and plans to spend Rs 80 crore in the second half as the business gains pace. “Going forward, we expect capex to pick up steam,” he said.
On the prospects for the second half, he stated, “Despite Europe’s slowdown, we expect to see export growth in the full year.” Domestically, we anticipate growth in the CV and air suspension markets for the rest of the year. Overall, while the third quarter may be subdued, we anticipate a stronger fourth quarter.”
He also stated that the corporation intends to expand the proportion of renewable energy in its portfolio from 26% today to around 75% by 2026.
Wheels India has manufacturing plants in Tamil Nadu, Maharashtra, Uttar Pradesh, and Uttarakhand, and produces wheels for trucks, agricultural tractors, passenger vehicles, and construction equipment, as well as air suspension systems for trucks and buses and industrial components for the construction and windmill industries.