India's Motherson Sumi Wiring profit falls on one-time costs

Motherson Sumi Wiring India

31/10/2022 10:34

Oct 31 (Reuters) - Motherson Sumi Wiring India Ltd
 MSWI.NS  reported a 12.8% fall in second quarter profit on
Monday, hurt by a spike in expenses and one-time costs to expand
production. 
   Motherson Sumi Wiring, demerged from parent Motherson Sumi
Systems in January, dominates India's wiring harness industry
with access to technology solutions from Japanese partner
Sumitomo Wiring Systems. Sumitomo holds a 25% stake in the
company.
    Net profit for the second quarter ended Sept. 30 stood at 
1.16 billion rupees ($14.03 million), compared with 1.34 billion
rupees a year earlier. Total expenses surged 37.4% to 16.9
billion rupees. 
    Quarterly revenue from operations jumped 31.1% to 18.35
billion rupees.
    MSWI, which made its market debut in March, said its
earnings before interest, taxes, depreciation and amortization
were hit by one-time startup costs related to new programs in
Bengaluru and a new facility in Chennai. 
    It incurred additional costs on expedited freight and an
extraordinary requirement for manpower. This was further
aggravated by supply chain constraints, the company said.
    "Indian automotive industry is showing signs of revival and
our customers are also ramping up production. This has resulted
in one-time costs which should be mitigated in the coming
quarters," Vivek Chaand Sehgal, chairman of Motherson Sumi
Wiring, said in a statement.
    India's automotive industry is recovering from the worst
slowdown in decades after the pandemic dealt a blow more than
two years ago, stirring a persisting chip shortfall. 
($1 = 82.7090 Indian rupees)
 (Reporting by Priya Sagar in Bengaluru: Editing by Dhanya Ann
Thoppil)
 ((Priya.Sagar@thomsonreuters.com;))