India's Force Motors posts Q3 profit on strong demand for passenger vehicles

Force Motors

12/02/2024 09:23

BENGALURU, Feb 12 (Reuters) - India's Force Motors
 FORC.BO  reported a fourth straight quarterly profit on Monday,
helped by strong demand for its multi-seater passenger vehicles
that are also used as school buses and ambulances, sending its
shares up 5%.
    The company, which also makes engines for BMW  BMWG.DE  and
Mercedes  MBGn.DE  cars in India, posted a consolidated net
profit of 854 million rupees ($10.3 million) in the third
quarter, compared with a year-ago loss of 155.9 million rupees.
    Until the year-ago quarter, the company had posted a string
of losses as the COVID-19 pandemic and its fallout dented
demand.
    Industry-wide commercial vehicle sales rose 3.5% in the
latest October-December quarter, while passenger vehicles sales
jumped 8.3% to a record high, which analysts said, was due to
festive season demand.
    Force Motors' domestic sales jumped 10.6% in the quarter.
Last week, Ashok Leyland  ASOK.NS  posted a bigger-than-expected
profit on strong demand for its trucks and buses.
    While Force Motors gets about 48% of its revenue from
vehicle sales, about 36% comes from contract engine
manufacturing, according to its last annual report.
    The company, which also makes tractors and off-roaders, said
revenue from operations rose 29.7% to 16.92 billion rupees in
the latest quarter.
    Its cost of materials, which forms the majority of total
expenses, rose 19.5%.
    Force Motors' shares rose about 5% after the results. They
fell about 5.4% in the December quarter, while Ashok Leyland had
risen 2.6%.
 
 ($1 = 83.0175 Indian rupees)

 (Reporting by Meenakshi Maidas in Bengaluru; Editing by Savio
D'Souza)
 ((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))