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%.
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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.
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By GlobalDataMotherson, 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”.
