Tube Investment slipped on concerns about slowdown in passenger vehicles and truck segment as 65% of its revenues come from automotive business. The impact of rupee depreciation on the business however is likely to be minimal. Managing director L Ramkumar doesn’t expect a significant growth for this year over last year.

The company got a project approved worth Rs 250 crore from the infrastructure business with larger diameter tubes. Ramkumar indicated that they have finalised the land for this project and have already ordered all the equipments.

"It will be 12 months by the time we put up the building and get the equipments installed. This project is expected to come up sometime in say early 2013," he pointed out. He also added that the funding for the project is largely dependant on internal generation with some debt.

Here is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying videos.

Q: What kind of impact does rupee depreciation has on the company?

A: We have a net exposure of may be USD 4-5 million in a year.

Q: You have some amount of exposure or rather large amount of exposure to the auto space. What are the trends that you are seeing from that space? Has there been any sort of slowdown in order inflows, etc?

A: In the two wheelers space, things are going strong. We cater to parts for two-wheelers, passenger cars and commercial vehicles. In the case of two-wheelers, things are going strong. In the case of commercial vehicles, light commercial vehicles are doing well. We have seen a slowdown in passenger cars in terms of off take of parts and components.

Q: What’s the contribution of passenger vehicles where there is a slowdown to the company? What’s the kind of slowdown that we are talking about?

A: At beginning of the year, we had planned the growth will be in double digit at around 12-15%. October was very bad because all the auto companies did badly. November saw a pick up and December will be at the same level as November. For the year, we don’t expect a significant growth over last year.

Q: Would you like to undertake any sort of diversifying strategies considering that you aren’t seeing as much growth as expected from the auto space?

A: We had got a project approved for getting into the infrastructure business with larger diameter tubes. We have just finalised the land for this project. We have already ordered all the equipments. It will be 12 months by the time we put up the building and get the equipments installed. This project is expected to come up sometime in say early 2013.

Q: What’s the investment for this project? How are you funding it?

A: It’s around Rs 250 crore. The funding is largely dependant on internal generation with some debt.

Q: Your profitability for the last quarter was up around 21% despite your margins being pretty much flat. What could you do on the bottom line for the entire fiscal?

A: We have to look at recovering all the cost increases, which we tried to do in bicycles during this quarter. Others are all driven by the automotive price negotiations. We are also concentrating on improving efficiencies and utilisation of capacities. All our capacities in the auto sector related businesses are full up. So, we are getting the benefit of full capacity utilisation.