Autoparts maker Motherson Sumi Systems booked a one fifth rise in fourth quarter profit as sales rose due to a recovering automobile market, beating analysts expectations and boosting its share price.
Consolidated fourth quarter net profit rose to INR769m from INR643.7m a year ago. Total income increased to INR8.4bn from INR5.97bn, Reuters reported.
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Analysts polled by the news agency had been expecting net profit of INR352.5m on sales of INR5.68bn.
Motherson’s consolidated full fiscal year net profit was almost flat at INR1.76bn while sales rose 28% to INR25.96bn.
“We are quite diversified and we have been increasing penetration in different pockets, we have also been continuously adding content per car,” Motherson Sumi’s chief operating officer Pankaj Mital told Reuters.
“As our customers come up with newer models, we have more products to supply to them,” adding that the firm took full advantage of the recent turnaround in domestic auto sales.
In India, higher borrowing costs and an economic slowdown put the brakes on new vehicle sales for much of [fiscal] 2008/09, but sales have improved since February, helped by government stimulus packages and rate cuts, Reuters noted.
Motherson Sumi makes parts including rear view mirrors, wiring harnesses and high-tension cables. It also makes construction equipment products.
Major automaker customers include Maruti Suzuki, Hero Honda (motorcycles), Mahindra & Mahindra and Tata Motors.
“Our consolidated revenues also include about a month’s sale of Samvardhana Motherson Visiocorp Solutions,” Mital told the news agency, referring to the firm’s acquisition of UK-based Visiocorp’s rear view mirror business in March, which was later renamed. Visiocorp 2008 global sales totalled about EUR660m.
“Going into the future, definitely the complete sales (of Visiocorp) will get added. That would lead to revenue growth. Plus, the Indian automotive market is also performing much better now,” Mital added.
“As new models keep coming in…and more technology goes in, that leads to more content through our joint ventures and our units,” he said.
