Hyundai India on a high with $217 million exports

By siliconindia staff writer   |   Friday, 27 August 2004, 07:00 Hrs
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NEW DELHI: Hyundai Motor India Ltd (HMIL) seems to be on a roll. The company has clocked a phenomenal Rs 1,000 crore in exports this calendar year and is all set to launch its premium B-segment model, the Getz, in the second week of September.

HMIL president B V R Subbu told Economic Times, a business daily, “Commercial production of the Getz has already started and we will determine the launch date on the basis of the logistics and the almanac.”

The company is waiting for the transporters’ strike to resolve before moving the cars out.

The Getz will be the second launch from the Hyundai stable this year after the Elantra, which has turned up the competition in the lower D segment.

The Getz launch has also been timed with the company’s capacity expansion from 1.5 lakh to 2.5 lakh units per annum.

HMIL, the only car MNC to earn black ink from the second year of operation, has just completed the capacity expansion funded from internal accruals.

A measure of the company’s financial health becomes evident from the fact that credit rating agency Fitch has given the highest credit quality F1+(ind)(CP) rating to HMIL’s Rs 50-crore commercial paper.

The company’s top credit rating indicates its strong liquidity thanks to large operating cash flows and significant cash and bank balances.

In 2002-03, the company’s operating cash flows stood at Rs 340 crore, with year-end cash and bank balance of Rs 550 crore.

The large cash balances and operating cash flows have helped the country’s second-largest car company fund its capacity expansion, which cost around Rs 800 crore, without additional debt burden.

The rating also takes into account HMIL’s successful strategy in tackling competition in the domestic car market, with MNC majors and local players jostling for greater market share.

Riding on a more than 50% increase in sales volume, HMIL expects to close 2003-04 with turnover of Rs 4,900 crore, up 15% over Rs 4,300 crore it clocked the year before.

As for profitability, the company expects its bottom line to mirror top line growth. With fresh capacity going on-stream mid-year, HMIL is targeting sales of around 2,00,000 units this fiscal.

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