Motherson Sumi Systems has posted a lower than expected 10% rise in quarterly profit due to higher costs.
The world’s largest maker of rear view mirrors reported a fiscal first quarter (April-June) consolidated profit of INR652.7m on sales of up 22% to INR22.72bn up 22%.
A Reuters poll of analysts had expected Motherson Sumi to double its profit to about INR1.2bn on net sales of INR22.9bn.
Start-up costs at plants in Hungary and Brazil that are close to their launch slowed the profit rise, CFO G N Gauba told Reuters.
Profit before tax at the Samvardhana Motherson Reflectec (SMR) unit, which is setting up plants in Hungary and Brazil, fell 29% while sales rose 20%. SMR contributes a little more than half of Motherson’s revenue. Expenditure went up 22% to INR21.64bn at Motherson.
Four new plants each in India and overseas will start production this fiscal year, Gauba said, but declined to comment how their launches would impact profits.
Motherson, which suppies Volkswagen, Ford, General Motors, Hyundai Motor and Maruti Suzuki, booked 34% growth in domestic sales and 16% in export.
“There is a pressure on costs,” Gauba said, adding the company was trying to increase the “efficiency of usage of capital”.
