K.T. Jagannathan

Chenai: The Rs. 450-crore Hinduja Foundries Ltd. (formerly Ennore Foundries) has indicated that the non-Ashok Leyland component in its turnover will rise to 65 per cent two years hence. Addressing a press conference here on Tuesday, V. Mahadevan, Managing Director, said 51 per cent of the current turnover came from sales to Ashok Leyland.

The company reported a profit after tax of Rs.16.92 crore on a turnover of Rs. 451.42 crore for 2007-08, up from Rs.16.16 crore in the preceding year on a turnover of Rs.395.24 crore. The Board of directors has proposed a dividend of 20 per cent. The company has been out of the dividend list after 1996-97. The promoters hold 69 per cent equity (post-the $15 million GDR issue) in the company.

Answering a volley of questions, Mr. Mahadevan asserted that the high-end needs of Ashok Leyland would be fully met by Hinduja Foundries. The company, he said, had drawn up an Rs.350-crore investment plan to drive up the capacity to 226,000 tonnes in the next two-to-three years. Currently, the company has a capacity of 152,000 tonnes (Ennore: 66,000 tonnes; Hyderabad: 36,000 tonnes; and Sriperumbudur: 50,000 tonnes).

Expansion of the capacity of its Sriperumbudur plant from 55,000 tonnes to 72,000 tonnes at a cost of Rs.30 crore, establishment of a 48,000-tonne Greenfield venture in Hyderabad at Rs.150 crore, setting up of a 2,500-tonne low pressure aluminium dye casting unit at Sriperumbudur at Rs.50 crore and putting up of a machining unit in Sriperumbudur at a cost of Rs.100 crore were among the projects currently under way.

Asked about the mode of funding these initiatives, company officials said they would rely on a combination debt, equity and internal accruals. Post-the GDR issue, the debt-equity ratio of the company stood at 1.95:1