Chennai, May 25 : Tyre maker TVS Srichakra Ltd will be expanding its capacity by 300,000 tyres per month to 2.3 million tyres per month at an outlay of Rs.150 crore this year, said a senior official.
He said the company is also developing tyres for two-wheelers to be rolled out jointly by TVS Motors Ltd and BMW.
"We will be investing Rs.150 crore this year to expand our capacity to 2.3 million tyres per month from the current two million tyres per month," director P.Vijayaraghavan told reporters here on Monday.
He said the funding will be a mix of debt and internal accruals.
About the tyres that the company is developing for the bikes to rolled out by jointly by TVS Motors and BMW, he said: "We are developing tyres for two models."
In 2013, TVS Motor and BMW signed an agreement to jointly develop motorcycles in the 250-500cc range to be sold through their respective distribution network.
According to Vijayaraghavan, the company is looking at good export orders for its newly-developed tractor radial tyres.
Following the success of tractor radial tyres, TVS Srichakra may go in for tyres for bigger earthmovers, he added.
Predicting a double digit growth for the company for 2015-16, Vijayaraghavan said the company has started rolling out tractor radials for export markets.
"We have made few models and the response is good. We will increase the tractor radial tyres. Going forward we may get into tyres for big earthmoving equipments," he said.
Currently 87 percent of the company's sales comes from two wheelers and the balance from off-the-road vehicles like tractors, agriculture implements, and forklifts.
Meanwhile the company closed last fiscal with a 13 percent growth in topline at Rs.1,895.99 crore up from Rs.1,679.99 crore posted during 2013-14.
Exports revenue accounted for around Rs.200 crore.
TVS Srichakra posted a net profit of Rs.103.79 crore last year up from Rs.47.45 crore logged during 2013-14.
Looking back at the fiscal that went by, Vijayaraghavan said the company's profit went up due to higher tyre sales in the after market; lower raw material prices; lower interest cost and judicious inventory controls.
The interest charges came down to Rs.29.89 crore from Rs.41.56 crore in 2013-14.
The company board has recommended a dividend of Rs.33.80 per share for last fiscal.
