The Rane group is expected to end the current fiscal with around eight per cent growth in its total sales, aided by robust exports and improved orders in the domestic market, ending stagnation in its growth curve. Its total revenue is expected to near Rs.3,000 crore for 2014-15. The auto component house, which had taken a huge hit in its profits during 2013-14 due to poor market conditions, has reported a strong performance for the first-half of this fiscal. Its net sales have grown by 14 per cent at Rs.1,471 crore as against Rs.1,291 crore in the year-ago period. Also, the profit after tax stood at Rs.47 crore as against a net loss of Rs.6.50 crore driven by cost-control measures and consolidation exercises.
Though it had projected a conservative growth outlook for this fiscal, the group is now seeing better growth prospects. “Group sales are likely to grow around eight per cent compared to the previous year,” according to its communication to investors.
It stated that the domestic automobile market showed some signs of improvement in recent quarters with significant growth from MUV (multi-utility vehicle) and two-wheeler segments. The M&HCV (medium and heavy commercial vehicle) segment also achieved a positive growth after a long time.
“Exports to the U.S. are expected to perform well, and the European markets likely to be stable. To maintain a strong focus on cost management initiatives for better profitability,” it added. According to Rane group Chairman L. Ganesh,its companies such as Rane Madras, Rane NSK and Rane Brake would lead the group’s growth in the immediate term.
Rane Madras has established a separate division — Rane Auto Parts — to focus on after-market sales of new products. This is expected to be an important line of revenue. It has also procured 25 acres at Sadasivpet in Medak district in Telangana for setting up a new plant for its die cast division. The first phase of construction is likely to be completed before March.
