Steel Strips targets 16-18% volume growth for FY15

Written By Unknown on Jumat, 02 Januari 2015 | 21.03

Mohan Joshi, corporate advisor strategic investments, Steel Strips Wheels said the commercial vehicle (CV) segment has seen a good growth in the quarter gone by and he expects a 25-30 percent growth in CV segment for the fourth quarter.

Joshi envisages a similar growth rate will continue for coming quarters too.

Steel Strips that manufactures automotive steel wheels is looking at a volume growth of 16-18 percent for the full year and turnover of around 15-16 percent.

December is normally a weak month for auto companies but January is likely to be better, and the company hopes to clock rim sales of 10-11 Lakh units on an average in the next quarter, said Joshi.

Their products comprises of wheels for Passenger cars, Multi utility vehicles, Tractors, Trucks, OTR Vehicles as well as Two and Three Wheelers.

Below is the transcript of Mohan Joshi's interview with Ekta Batra & Reema Tendulkar on CNBC-TV18.

Ekta: Its 18 percent gain this time around but you are truck segment seems to have outperformed? Can you tell us what is happening in terms of your dispatches towards the truck segment in particular?

A: What has been happening over the past few months is month on month improvement in the commercial vehicle (CV) segment and the last quarter which is visible to us now is extremely good in terms of CV dispatches.

What we are expecting is that probably a lot of development which has happened with us in terms of new wheels are now coming into mass production along with that there is a steady increase in the market share grabbing by Steel Strips Wheels from the total market.

As the market is growing at 8-10 percent and we are hoping that the last quarter is going to be the penultimate quarter where all the original equipment manufacturers (OEMs)  are going to be producing larger number of trucks as compared to averages of last three months as well as last three quarter. So we expect that over next three months my growth for commercial vehicle segment is anywhere between 25-30 percent.

Typically, in the month of December we had a large number and probably the growth stood at Rs 350 odd was because of very weak base of last year because of obvious reasons of extreme slowdown in the CV segment but we have seen this number moving up steadily over past five-six months and we expect that this 20-25 percent kind of a number for us is going to maintain over next coming quarters.

Reema: Can you tell us what the total sales growth has been for the company from April to December – that's in the first nine months of the fiscal year?

A: If I talk about the volume growth, we are working at 15-16 percent volume growth as against last year and in terms of value growth, we are 13 percent right now. For the full year we are anticipating 16-18 percent volume growth and turnover we are expecting around 15-16 percent.

Ekta: Can you tell us what you will be clocking on monthly basis in the next three months at least for the next fiscal, are you going to better the 10.1 lakh, are you going to be less than or maybe improved or maybe the same?

A: December is usually the shutdown month so this is one of the weakest set of number that we have because Maruti along with Honda; all across OEMs are largely shutdown for six-seven days which is not going to be prevalent in the last quarter and probably we are going to clock anywhere between 10.5 lakh to 11 lakh on an average over next three months.

Reema: Why tractor segment was down 55 percent in this month?

A: Over past five-six months as everybody knows that the tractor segment is not doing good for any of the market leaders like Mahindra & Mahindra or Escorts or anybody for that matter because of two reasons. One, the actual ground movement of infrastructure projects, where the alternate use of tractor is happening and impact of lower kharif as well as rabi sowing which got impacted because of monsoons is now taking a toll.

Last year we had a very extravagant year wherein the tractor segment grew by 25 years and there was a huge base which was created for the financial year '13-14 – that base was large enough to climb and on top of that these two factors have pushed a little in terms of slowing down of the sales along with a cash crops across the globe, there is a huge drop in food prices of corn, wheat and rice and that is why the exports have also been dampened for the larger player like ITL, like Mahindra or John Deere.

These are few of the reasons why in the month of December they had a large inventory control and what we are anticipating in the month of January that probably as compared to December, January is going to be far better and you may see 40-45 percent pickup coming in tractor segment because of the inventory control already done by the OEMs in the month of December.

Steel Str Wheel stock price

On January 02, 2015, Steel Strips Wheels closed at Rs 358.30, up Rs 6.60, or 1.88 percent. The 52-week high of the share was Rs 380.60 and the 52-week low was Rs 112.00.


The company's trailing 12-month (TTM) EPS was at Rs 18.93 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 18.93. The latest book value of the company is Rs 239.51 per share. At current value, the price-to-book value of the company is 1.50.


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