(Reuters) – Motherson Sumi Wiring India reported quarterly profit below estimates on Monday due to higher expansion costs.
The company’s net profit fell nearly 4% to 1.43 billion rupees ($16.51 million) in the three months ended June, from 1.49 billion rupees a year ago.
It came in below analysts’ estimates of 1.53 billion rupees, according to data compiled by LSEG.
The company, which sells wiring harness solutions to carmakers including Maruti Suzuki and Tata Motors, reported a 14% rise in revenue from operations to 24.95 billion rupees.
Overall expenses rose nearly 16%, outpacing revenue growth.
KEY CONTEXT
Motherson Sumi Wiring has been expanding production capacity with three greenfield projects that would support wiring demand for both electric and gas-powered vehicles. Two of three plants have not yet ramped up production, the company has said.
Associated costs have led to a decline in profit in the last two quarters.
In the reported quarter, the company booked 260 million rupees in start-up costs, compared to 130 million rupees last year.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Motherson Sumi 22.33 20.72 13.90 23.39 Buy 12 0.90 1.40
Wiring India
UNO Minda 48.36 26.62 18.21 26.71 Buy 16 0.96 0.21
Exide Industries 25.00 15.00 8.21 13.84 Hold 12 0.96 0.53
Bosch 46.02 38.69 10.56 13.15 Hold 4 1.26 1.35
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL TO JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.6275 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Sonia Cheema)
