Minda Corporation’ Q4 FY2017 net profit up 27.7 percent

Gurgaon-based component maker has reported revenues of Rs 296 crore for FY 2016-17, a year-on-year increase of 21.1 percent from Rs 245 crore in FY2016.

Q4 FY 2017 stood at Rs 761 crore with operating EBITDA Rs 3.38 crore (EBITDA margin 4.4 percent), up by 18.1 percent compared to Q4 FY 2016 revenue at Rs 644 crore with operating EBITDA Rs 4.94 crore (EBITDA margin 7.7 percent), the decline in margins were attributed price increase in commodities, losses in one of the subsidiaries, and initial expenses towards strategic investments in expansion projects.

The company’s net profit for Q4 2017 stood at Rs 1.91 crore lower by 27.7 percent from Rs 2.64 crore in Q4 2016, for FY2016-17 the net PAT came at Rs 9.61 crore (margin of 3.2 percent), down from 10.7 crore in FY 2016 (margin of 4.4 percent), a change of -10.4%.

Commenting on the results, Ashok Minda, chairman and group CEO said, “The year 2017 was outlined with momentous events both in the Indian economy and internationally including the passage of GST, demonetization, volatile events such as Brexit and the elections in the US. During the year, we continued our expansion and innovation with significant developments at Minda Corp. We inaugurated the new plant at Mexico and commenced the production of Interior Parts. We also entered into a joint venture with SBHAP, China for the supply of plastic products through Minda KTSN. The PAT margin for FY2017 was impacted due to Minda Furukawa and now turnaround initiatives are in progress.”

With new business and orders picking up the company expects net profit margins to recover 2017-18, along with structured reform in Minda Furukawa JV, with steps including re-negotiation of raw material prices with JV partner and domestic suppliers , reduction in royalty payments to Furukawa and rationalization of manufacturing facilities.

The new R&D facility - Spark Minda Technical Centre (SMIT) is ready which will help the company to innovate futuristic technologies in Automotive sub-systems. The company inaugurated its new manufacturing plant located at Queretaro Industrial Park, Mexico. Minda KTSN Plastic Solutions Mexico is a part of Minda KTSN Plastic Solutions, Germany (Minda KTSN) which was set up in 2007 to oversee the company’s European operations specialising in manufacture of interior automotive components like gloveboxes and panel parts, for supplying to its key customer, the Volkswagen Group.

The company is also setting up its third Greenfield die casting plant in Pune doubling its capacity in three years which is expected to be operational in FY 2017-18, with initial investment of Rs 75 crore.