3M India posts first quarterly profit drop in three years as costs bite

3M India

12/11/2024 13:31

Nov 12 (Reuters) - Diversified products maker 3M India
 TMIN.NS  reported its first drop in quarterly profit in three
years on Tuesday, pressured by higher expenses and weakness in
its transportation and electronics segment.
    The company, whose products range from "Post-it" notes to
power tools, reported an 8.4% fall in profit after tax to 1.34
billion rupees ($15.9 million) for the second quarter ended
Sept. 30.
    Its revenue from operations rose about 7% to 11.11 billion
rupees. However, expenses rose about 10% to 9.46 billion rupees,
mainly due to a 26% jump in material costs.
    "We experienced cost headwinds both due to elevated freight
costs as well as material cost increases," Managing Director
Ramesh Ramadurai said.
    The higher expenses pressured 3M India's earnings before
interest, tax, depreciation and amortization (EBITDA), which
shrunk to 2.01 billion rupees from 2.10 billion rupees a year
ago and 2.27 billion rupees in the previous quarter.
    The company's transportation and electronics segment, which
houses products including automotive parts, lighting products
and wires and cables and contributes 35% of revenue, reported a
1.4% fall in revenue.
    Demand for automotive parts was dull as Indian carmakers'
sales to dealers marked the first decline in 10 quarters in the
July-September period, industry data showed.
    Meanwhile, revenue in the safety and industrial segment,
which offers products such as face shields and construction
hats, grew nearly 9%, helped by pick-up in infrastructure and
manufacturing activity.
    3M India, the Indian arm of the U.S.-based industrial
conglomerate 3M  MMM.N , said its revenue from its health care
segment grew 19%.
    The company has been hiking prices across its product range
over the past few quarters, dampening demand.
    Last month, 3M reported about an 18% rise in quarterly
profit as cost cuts countered the impact of slow sales in its
consumer business.


($1 = 84.3500 Indian rupees)

 (Reporting by Dimpal Gulwani; Editing by Sumana Nandy and Varun
H K)
 ((Dimpal.Gulwani@thomsonreuters.com;))