Motherson Sumi Systems reported 35.8% fall in consolidated net profit to Rs 216.86 crore on a 5.9% decline in total revenue from operations to Rs 14,076.39 crore in Q2 FY22 over Q2 FY21.
Total expenses fell by 3% YoY to Rs 14,001.29 crore in the second quarter.
Profit before tax in Q2 FY22 stood at Rs 178.67 crore, down by 67.7% from Rs 553.58 crore in Q2 FY21. Total tax outgo was down 48.3% YoY to Rs 85.63 crore during the period under review.
Motherson Sumi said that cost controls along with partial revenue recovery in India (including SAMIL subsidiaries and JVs) have led to a strong operating performance despite headwinds. Sharp drop in OEM production across key geographies due to supply chain constraints have continued to have an adverse impact on revenues and profitability.
SMRPBV impacted by lower revenues along with higher input, labour and freight costs in key geographies; thereby adversely affecting profitability in Q2. PKC was impacted sharp drop in volumes QoQ in China and EU along with continued impact of elevated costs due to new launches and supply chain disruptions.
The company is awaiting NCLT approval for next steps of proposed re-organization. It had also announced acquisition of 55% in CIM Tools (India) and 60% in Nanchang JMCG Mekra Lang Vehicle Mirror Co., Ltd. (China) in October 2021.
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With regard to auto industry, Motherson Sumi said that global demand for passenger vehicles remains strong. However, supply side challenges likely to continue in Q3 as well. Raw material prices remain elevated, although contractual lag in pricing is expected to narrow.
Vivek Chaand Sehgal, chairman, Motherson Sumi Systems, said, "The global automotive industry continues to face multiple challenges on account of supply chain disruptions. Our strategy of 3CX10 (no component, no country, no customer more than 10% of our turnover) has helped us limit the impact to our earnings. Our teams are working very hard to support the customers and deliver value to our stakeholders. We are focused on controlling our cost structure and conserve cash in the current volatile market conditions. We expect the industry headwinds to ease gradually in the upcoming quarters."
Motherson Sumi Systems is a specialised automotive component manufacturing companies for OEMs.
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