Wheels India Announces ₹225 Cr Capex for FY25 and Plans European Subsidiary.

Wheels India has announced a capital expenditure plan of ₹225 crore for the current fiscal year, aiming to ramp up capacity in several product segments to meet emerging demand.

The proposed capex will focus on machining large castings, aluminum wheels, earthmoving wheels, tractor wheels, and hydraulic cylinders. The production capacity of aluminum wheels is set to increase from 25,000 to 40,000 wheels per month this year, stated S Ram, Chairman of Wheels India, during the company's 65th Annual General Meeting held via video conference.

The company saw significant growth in its construction equipment industry segment in FY24, with increased volumes across most customers. Following the merger of Sundaram Hydraulics Ltd with Wheels India in FY24, the hydraulic cylinder business has grown and become profitable, with expectations for continued growth.

Addressing the non-auto business, Ram noted that while demand for windmill components was muted in FY24, the company ramped up production at its plant machining large windmill castings, making the plant profitable and poised for further growth in collaboration with their casting partner.

Wheels India's export business experienced considerable growth in FY24, increasing by 24.5%, driven by the export of earthmover and aluminum wheels. The company has incorporated a subsidiary in the US and plans to establish one in Europe to boost business development in these regions, aligning with its commitment to expanding its export business.

New export opportunities with major global tractor manufacturers are also expected to benefit the company in the coming years.

Responding to a shareholder's question, Managing Director Srivats Ram indicated that the bottom line should improve in FY25 due to the company’s diversified product mix and strategic efforts. “The mix of products should help us improve and sustain the profit,” he said.

The company's annual report for FY24 mentioned that while the commercial vehicle market is expected to remain flat in FY25, bus demand is projected to stay strong. In the cast aluminum business, initial supplies to vehicle manufacturers saw muted volumes, but the company anticipates starting supplies to a large Indian vehicle manufacturer this fiscal year, which should help it approach breakeven volumes for the plant.

HBL