Thrust On Core Sector, Cheap Credit To Drive Growth: SFL

Chennai, Sept 25: | Updated: Sep 26 2003, 05:30am hrs
In what can be viewed as another evidence of the feel good factor that is sweeping across corporate India, Suresh Krishna, chairman & managing director, Sundram Fasteners Ltd (SFL) said that the future outlook has never been more sanguine in his entire career spanning over 40 years.

He was speaking at the companys 40th annual general meeting in Chennai on Thursday. Thrust for infrastrutural development such as the Golden Quadrilateral and other projects has triggered demand across the spectrum.

Added to this, he said, was availability of cheap credit which is fuelling the offtake - be it commercial vehicle, cars or two-wheelers. Outsou-rcing, especially from the US has picked up substantially. All this, he said, would have a positive impact on SFL. SFLs capacity utilisation is improving rapidly on account of sustained demand and the company is planning to add more equipment shortly.

About Rs 25 crore will be invested in India and Rs 15 crore will be spent as capital expenditure in China this year, Mr Krishna said.

At the same time he cautioned that the company was seeing a sharp increase in input costs especially on account of increase from steel prices and petro-products, wage revision, etc. SFL is attempting to reign in the cost by improving productivity. He said that margins have come under sustained pressure and SFLs customers were seeking price reduction.

He informed the shareholders that for the first five months of the current fiscal the domestic sales had increased by 16 per cent and exports improved by 27 per cent. For the year 2002-03 SFL had posted turnover of Rs 519.43 crore (domestic sales Rs 423.38 crore and exports Rs 96.06 crore). Profit after tax was Rs 45.39 crore and a dividend of 120 per cent was declared.