Steel Strips Wheels bags major export order from Renault

In an interview to CNBC-TV18, Dheeraj Gargh, Managing Director of the company, spoke about the company’s orderbook and its future plans.

Here is a verbatim transcript of an exclusive interview with Dheeraj Gargh on CNBC-TV18. Also watch the accompanying video.

Q: Could you just lineup your recent orders?

A: We have recently got an order from Renault, Brazil for the Logan car, which is for about 200,000 wheels annually. We have just been recently nominated for the project in Morocco which is a new project that Renault is going to build in there and has started construction on it. We are exclusive suppliers of steel wheels for that project. We expect to supply on an average 500,000 wheels per year for the five year period. So it is about three million in five years.

Q: How big is this order for you in terms of your total orderbook? How much will this contribute in your revenue? You did about Rs 100 crore in second quarter, is this over a five year period?

A:  This should be about 10% per annum of about last years sales. So this is quite a sizable order. As far as the orderbook is concerned, we are going to have about 40% growth in numbers. Hence, next year we expect doubling of sales. This is because a lot of our export orders have come into play which we have received in the past.

Q: So at the moment are you working with full capacity?

A: Yes right now our Chandigarh plant is at full capacity. Our new Chennai plant is almost operating at about 60% capacity and we are looking for using our Chennai plant for the second phase of expansion to take care of the requirement next year. Therefore, we are definitely expanding our Chennai and Jamshedpur plant which is actively in construction. We should be in for our truck wheels production by April 2010.

Q: For which period in the first half you could not produce the capacity since you have a sizable exposure?

A: We are increasing our utilization from 80% to 90%. Since September, we are picking our capacity every month. We are actually increasing our production and are also debottlenecking our plant and ensuring that we cross 100% utilization. By the end of the year, we would cross 100% utilization on an annualized basis for March. We have orders in March that exceed our capacity which is rated at the moment.

Q: How much you expect to do by way of a bottom-line? You have done about Rs 4 crore this quarter. How much can we expect in the next couple of quarters?

A: We have already achieved our last year’s bottomline in the first six months. In the next six months, we will exceed market expectations and hope that we will more than double our net profit made last year.