Motherson Sumi reported a 290% year-on-year increase in consolidated net profit of ₹714 crore for the quarter ending March 31, as vehicle production returned to pre-Covid level in India and foreign markets
Driven by a faster recovery in production of vehicles across the globe, Motherson Sumi Systems Ltd- one of India’s leading automotive component manufacturers – posted a sharp rebound in net profit and revenues for the March quarter. The Noida-based company reported one of its highest ever revenues during the quarter, indicating strong recovery in operations to pre-Covid level.
Motherson reported a 290% year-on-year increase in consolidated net profit of ₹714 crore for the quarter ending March 31, as vehicle production returned to pre-Covid level in India and foreign markets. The bottom line though was impacted by higher input cost due to sustained increase in commodity prices.
Vehicle manufacturing in India improved sharply during the quarter as Original Equipment Manufacturers (OEMs) increased production to replenish stocks at dealerships as retail demand surpassed supply of vehicles.
The New Delhi based manufacturer, though returned to profitability, after beginning the fiscal year with an unprecedented a loss for the June quarter due to the stringent lockdown measures imposed to contain the spread of Covid-19 pandemic.
Due to recovery in business across geographies, the revenue from operations during the quarter improved by 19% year on year to ₹17844 crore. The operating profit or earnings before interest, tax, depreciation and amortization (EBITDA), also jumped by 44% y-o-y to ₹2006 crore due to the overall improvement in sales and costing cutting measures taken by the company.
The Noida based company though witnessed a sharp 26.2% increase in raw material cost during the quarter as result of the sharp jump in commodity costs; other expenses also jumped by 18%.
“We appreciate the overwhelming support from shareholders with regards to the group re-organisation. It reinforces our belief in the merits of the reorganisation scheme. The Q4 and FY21 results are reflection of the tremendous hard work that our teams have put in globally despite multiple challenges and sets the tone for us to achieve our stated Vision 2025 targets." said Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems.
The growth in the fourth quarter was aided by the low base in the corresponding period when vehicle production declined substantially in China and other markets due to lockdown imposed to contain the spread of Covid-19 pandemic. India business was impacted due to transition to BS 6 norms.
“Motherson Sumi Systems (MSSL) reported healthy operational performance in Q4FY21 and was above our estimates on all fronts. The key highlight for the quarter was sustained profitability at its overseas operations i.e. SMR & SMP," said analysts of ICICI Securities.
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