Remote Working Has Enabled Cost Efficiency, Says Motherson Sumi’s Sehgal
The company’s shares rose nearly 14% on June 2 after it beat estimates for quarterly profit.
Motherson Sumi Systems Ltd.’s shares rose the most in over 13 months after it beat estimates for quarterly profit.
Net profit of India’s largest auto ancillary—which counts Audi AG, Daimler AG and Volkswagen AG as its top customers—fell 11% sequentially to Rs 714 crore in the quarter ended March, according to its exchange filing. Analysts’ estimates compiled by Bloomberg had projected a profit of Rs 536 crore.
“Work from home, working from the plant and not travelling too much has given team time to bring in cost efficiencies into real action,” Chairman Vivek Chaand Sehgal told BloombergQuint in an interview on June 2.
Q4 Results: Highlights (QoQ)
- Revenue fell 1% to Rs 16,972 crore, compared with the estimated Rs 16,757 crore.
- Operating profit fell 4% to Rs 1,626 crore, against the projected Rs 1,782 crore.
- Margins at 9.6%. Analysts had pegged the metric at 10.5%.
Motherson Sumi, which is one of the world’s largest makers of automotive wiring harnesses and mirrors for passenger cars, also pared its gross debt to Rs 10,758 crore from Rs 11,790 crore as of March 2020. Net debt fell to Rs 4,820 crore from Rs 6,917 crore as of March 2020. This has led to its “lowest ever” debt-to-Ebitda ratio, the company said in a statement.
Watch the full interaction here: