DSK group banks on auto biz to turn profitable

Pune: DSK Motowheels — the motorcycle venture of Pune-based DSK Group — hopes to turn profitable in the next six months even as its real estate business continues to be in rough waters.
The company will launch 3-4 new models by the end of the current fiscal. The company, which sells Benelli and Hyosung bikes, aims to take its dealership network in the current fiscal to 50 from the present 26.
The company sold about 3,450 motorcycles in the last financial year — 38% more than what it sold in the previous financial year.
Asked if the company is insulated from the troubles of its group company, Shirish Kulkarni CEO of Motowheels and executive director of the DSK Group said, “It may affect…depends on how we come out of the real estate slow down.”
The DSK group, which is into real estate, is trying to liquidate its land bank to pay off debts. Kulkarni said at this point, about 20 acres have been put on the block and the deal is almost through.
Kulkarni said the group will focus more on the auto business, which also includes its car dealership with Toyota in Maharasthra. It sells about 6,500 cars for Toyota in the state that brings in Rs 1,200 crore revenue for the company. Margins, however, are lower at 1-1.5%, according to Kulkarni.
DSK Group’s chairman DS Kulkarni expressed confidence that they will turn around the real estate venture.
Auditors of the company said the company has been defaulting on its debt payments and salaries – something that has led to the downgrading of the company’s debt ratings.
The company has about six ongoing projects, but Shirish said there are no buyers. “We will focus only on completing the projects on hand,” he said.
He said the provisions of the Real Estate Regulation Act will make it extremely difficult for the company to operate the business.