Kolkata, Nov 23 (IANS) Tata Steel Processing and Distribution Ltd (TSPDL), a wholly−owned subsidiary of Tata Steel, Friday said the current slowdown in the country's automotive sector would lead to a less than 25 percent sales growth this fiscal.
The company, now the country's largest steel service organisation whose more than 70 percent of service products are for the auto segment, originally had a target of 25 percent sales growth for the current financial year.
"Currently demand from auto makers is quite low. For the last few months, especially in commercial vehicles segment, inventories have already built up with dealers. So everybody has to slowdown. Automatically, round the chain we got affected," TSPDL chief operating officer Abraham G Stephanos told reporters on the sidelines of an event organised by the Indian Institute of Materials Management (IIMM) here.
The firm fears that overall automobile industry sales growth at the end of this fiscal would probably be worse than SIAM's projection of one to three percent.
"We are expecting that probably it is going to be worse than what SIAM has projected. The growth can be even slower," Stephanos observed.
At the beginning of this fiscal, Society of Indian Automobile Manufacturers (SIAM), however, projected a 9 percent to 12 percent growth. It had slashed its estimates last month for car sales in the current fiscal year on the back of overall slowdown in the economy.
With the demands from the auto segment worsening, the TSPDL official said the company would not meet it original sales target for 2012−13.
"Automobile is one of our big customer segments. So the slowing down has been a major impact. We will be growing a little bit above of our last year's sales, but not as much as we had planned. Originally, we had planned about 25 percent growth (for this fiscal)it is too early to say, but it would not be the 25 percent growth," Stephanos maintained.
The Kolkata−headquartered company had clocked a 17.20 percent year−on−year growth in its income for 2011−12 to Rs.1,867.73 crore.
The firm has been servicing steel products for construction, mining and white goods industry.
"Demands from sectors like construction and mining equipment are also witnessing a drop," Stephanos added.