Buoyed by a 42.05% jump in third quarter consolidated net profit, auto parts-maker Motherson Sumi Systems today said it will invest about Rs 500 crore next fiscal on initiatives like setting up new units in Brazil, Thailand and South Africa.
The company today reported a consolidated net profit of Rs 106.37 crore for the quarter ended December 31, 2010, compared to Rs 74.88 crore in the same period of the previous year.
Consolidated total income during the third quarter of FY11 also jumped by 18.61% to Rs 2,152.57 crore from Rs 1,814.81 crore in the year-ago period, it added.
"During the last quarter, the domestic market witnessed robust growth that helped us a lot. Better utilisation of capacity and control in costs also drove our net profit upward," Motherson Sumi Systems (MSSL) Chief Operating Officer Pankaj Mital told PTI.
As of December 31, 2010, the company's consolidated debt stood at Rs 991.16 crore.
Asked about the firm's expansion plans, MSSL Chief Financial Officer G N Gauba said: "We will be investing about Rs 500 crore in 2011-12 for expanding our current capacities and for setting up of new facilities across the globe."
The investment amount will be divided equally between the Indian and overseas markets, he added.
MSSL, which is a leading global manufacturer of rear-view mirrors, has already started the construction of a greenfield facility in Brazil. It will be operational in next 18 months.
"We are in the process of acquiring land in Thailand... There will also be one new plastic moulding unit in South Africa," Gauba said. However, he declined to share other details on the investment plans, such as the production capacity of the proposed facilities.
These two facilities are expected to be ready by 2012-13, he added.
In addition, MSSL is in the process of constructing a facility in Hungary, which will be operational by next fiscal. It will mainly deliver orders worth 800 million euros for light mirrors in the next 5-6 years that it has already received.
On the funding sources for the planned investment, he said it will be through a mix of internal accruals and debt.
The company had earlier announced plans to invest up to Rs 500 crore this fiscal to set up four new facilities at Bangalore, Chennai, Pune and Haldwani (in Uttarakhand) for supplying components to different manufacturers, including Toyota, Tata Motors, Nissan and Ashok Leyland.
Motherson Sumi Systems is the flagship company of the Samvardhana Motherson Group and is a joint venture between the group and Japan-based Sumitomo Wiring Systems. It has over 90 facilities in 22 countries across the world.
Reacting to the results, shares of MSSL were trading 1.76% higher at Rs 182.30 apiece on the Bombay Stock Exchange during late afternoon trade today.
