By IANS,
Chennai : Two-wheeler major TVS Motor Company is planning to invest around Rs.150 crore this fiscal towards capacity expansion and research and development, and another Rs.40 crore in a non-conventional energy subsidiary.
“The fresh investment will go into our existing plants to increase two-wheeler capacity from 2.2 million units to around 2.8 million units. The expansion will be funded out to free cash with the company,” S.G. Murali, executive vice president, told IANS.
According to him, the company had generated around Rs.200 crore free cash last year and this is expected to grow this year with sales picking up.
He said the company has sufficient three-wheeler capacity at 60,000 units per annum.
TVS Motor will become an interest-free company from fiscal 2011-12 onwards.
“Quarter on quarter the interest cost is coming down. Currently our long term interest bearing loan is around Rs.600 crore. The external commercial borrowing will be paid off by 2011. For the current year the interest cost will more or less remain at last year’s level, that is around Rs.62 crore,” Murali said.
According to him, the company will keep an eye on working capital usage by focussing on inventory levels.
TVS Motor closed 2009-10 with a turnover of Rs.4,424 crore and an after tax profit of Rs.86.49 crore, up from Rs.3,736 crore and Rs.31.08 crore earned the previous year.
The company sold 1.52 million two-wheelers last year as against 1.34 million units the previous fiscal.
Three-wheeler sales of the company grew substantially from 4,613 units in the year ended March 2009 to 14,730 units in the 2009-10 year.
About the company’s investment in TVS Energy, he said: “We are looking at green power. To start with the company has set up 20 MW windmills to generate around 25 MW. The windmills will start operating from June/July onwards.”
TVS Motor has also increased its investment in its Indonesian venture last quarter by infusing Rs.36.61 crore.