Two wheeler major TVS Motor is planning to invest around Rs 350 crore during the current fiscal. The proposed investment is to increase company's two-wheeler and three-wheeler manufacturing capacities, product development and toward the BMW project. The company is also planning to invest in its Indonesian arm and in its financial arm TVS Credit.
During an earnings call, company's President and Chief Executive Officer K N Radhakrishnan and its Chief Financial Officer S G Murali said that the company plans to invest around Rs 350 crore during the current fiscal.
An email sent to company's spokesperson did not elicit response.
The investment will be mainly in developing products, capacity expansion and in the project, which it is doing with BMW. Last year the company spent around Rs 450 crore as capex.
Company plans to expand total two-wheeler manufacturing capacity to around 3-3.2 million units from the current 2.8 million units a year. Three wheeler capacity will be increased to 1.50 lakh units from one lakh units currently. Expansion will come mainly in Himachal Pradesh and Mysore plants.
TVS Motor's all the three facilities in the country are flexible to manufacture all the three products, including two-wheelers, mopeds and three-wheelers.
"We will be reviewing our capacity expansion every quarter," said Radhakrishnan during the call.
All the three facilities of the company can manufacture all the three products including scooters, motorcycles and mopeds.
Besides, the company is also planning to invest around Rs 40-50 crore in the Indonesian arm and around Rs 75-100 crore in credit service arm TVS Credit Services Ltd, which funds two-wheelers, tractors, three-wheelers and used cards. Currently the financial services company has a loan book is around Rs 2,700 crore.
Speaking about the Indonesian business, they said, PBT loss of the Indonesian arm has come down to $7 million and company made a profit of Rs 55 crore by selling a land.
"Industry was bit slow in Indonesia, Japanese market share is dominated by almost 98-99 per cent, so it taking little longer time. We are using the platform, which the company developed in the country to expand our exports, while trying to establish in the domestic market," they said during the call. The company while it will focus to cut down the loss. Combination of export thrust managing with the existing dealers is the strategy the company used in 2014-15 and will continued to do so for this year.
If the company can reach around 6,000-7,000 units a month (in Indonesia), then the company can report breakeven. Focus is going to be on exports, while working on region based volumes in Indonesia, they said.
During the year ended March 2015, PT TVS Motor Company Indonesia, the subsidiary registered total sales of 23,348 units compared to 19,191 units in the previous financial year.
Company's total revenue crossed the landmark Rs 10,000 crore figure during the current financial year. Total revenue increased by 26.8 per cent, growing from Rs 7,965.94 crore in the year ended March 2014 to Rs 10,098.22 crore in the year ended March 2015.
Profit After Tax grew by 32.9 per cent increasing from Rs 261.63 crore in the year ended March 2014 to Rs 347.83 crore in the year ended March 2015.
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