Mumbai: Auto parts maker Sundram Fastners Ltd said a rising rupee, higher input costs and sluggish auto sales dragged down December quarter net profit by 14 %, missing analysts’ forecasts.
The company, part of auto and financial services-focussed TVS group, posted a net profit of Rs180.4 million on a 2.3% fall in sales to Rs2.98 billion.
A Reuters poll had seen net profit at Rs193 million on net sales of Rs2.92 billion.
“Profits fell on account of lower realisation on exports and increase in cost of raw materials,” Sundram Fasteners said in a statement.
Total expenditure as a percentage of sales rose to nealy 90% from 86% a year ago, hit hy higher steel prices and wages.
Price of steel, a key raw material, rose more than 40% in 2007 while the rupee appreciated 12.3% against the dollar, chewing into margins.
Sales were pulled down by lower exports in value terms and a slowdown in commercial vehicle and two-wheeler sales in the country, it said.
Automobile sales in India fell nearly 2.5% in April-December led by two-wheeler and commercial vehicles, the company’s key clients, due to five-year-high interest rates.
Sundram Fasteners’ shares were down 2.5% at Rs42.20 in a weak Mumbai market.