March 25 (Bloomberg) -- Tube Investments of India Ltd., maker of BSA Hercules bicycles and steel products, will spend 200 million rupees ($4.4 million) in the next fiscal year to add stores as rising incomes spur demand.
The Chennai-based company plans to open 320 new stores in the next three years to the 680 outlets it operates across the country, Raghuram Devarakonda, president of unit TI Cycles of India said in an interview. Bicycles contributed 31 percent of revenue at Tube Investments for the year ended March 31, 2010, according to data compiled by Bloomberg.
Wages in India are expected to rise at an average 12.9 percent this year, according to a survey by AON Hewitt LLC, which may lead to higher spending on leisure activities.
Sales of electric scooters, which Tube Investments started making three years ago, may grow to as much as 120,000 units this year from about 85,000 last year, according to Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles.
Tube Investments rose 0.8 percent to 127.05 rupees in Mumbai trading. The shares have declined 16 percent since the start of the year, compared with an 8.3 percent drop in the benchmark Sensitive Index of the Bombay Stock Exchange.
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