Indian vehicle parts makers are likely to see a moderate rise in July-September net profit, after a hardening rupee pressured export margins and sluggish domestic auto sales hit demand, a local report said.
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Most firms in the sector are expected to report net profit grew by about 15% on year, or at nearly half their previous growth rate, and a few could actually see net profit slipping, a Reuters poll of brokerages showed.
“Margins are expected to be under pressure due to high input costs and no price hikes,” Angel Broking reportedly said in a research note. “An appreciating rupee is expected to pull down companies with high exports exposure.”
The rupee has risen nearly 12% against the dollar in 2007, Reuters noted.
Total automobile sales in the first half of the fiscal year have fallen 5.91% to 4.6m units, data from the Society of Indian Automobile Manufacturers showed.
Research firm SSKI said in a research note it expected auto parts makers to grow their revenue by 10% this quarter, according to Reuters.
