SMG posts best ever Q2 performance

November 12, 2012: Q2 FY13 has brought good tidings for the Samvardhana Motherson Group (SMG) which has posted its best ever Q2 performance with highest ever Q2 sales, profit before tax (PBT) and profit after tax (PAT).

Riding this growth and contributing majorly to this milestone are flagship company Motherson Sumi Systems Ltd (MSSL) and Samvardhana Motherson Finance Ltd’s acquisition of the Peguform Group of Germany in November 2011 now known as SMP. MSSL is a joint venture between SMG and Sumitomo Wiring Systems of Japan.

SMP figures have been included in MSSL results for the first time in FY13 and these have given the MSSL revenues a healthy look. To a lesser extent, SMG’s acquisition of European parts maker company Visiocorp in March 2009 (known as SMR) has also contributed to the best ever quarter revenues of MSSL. SMP posted a strong performance with PBT turning around from (Rs 94 crore) Q1FY13 to Rs 54 crore in Q2 of the fiscal. However, EBITDA dipped from 4.2 percent in Q1 to 3.7 percent of FY13 and revenues were also down from Rs 3,285 crore in Q1 to Rs 2,954 crore in Q2 of the current fiscal. The drop in revenues has been attributed to summer holidays in Europe by the company. Vivek Chaand Sehgal, chairman of SMG and vice-chairman of MSSL, had earlier told Autocar Professional that SMG specialises in taking over plants in the red and then turning them around.

Proving this point is SMR’s EBITDA that rose from 1.7 percent in the first quarter post acquisition to 3.3 percent in Q2FY12 and 5 percent in Q2 FY13. SMR’s PAT turned from negative (Rs 18 crore) in Q2 FY12 to a positive Rs 6 crore in Q2 of the current fiscal.

Meanwhile, consolidated MSSL revenues grew a whopping 153 percent from Rs 2,290 crore in Q2 FY12 to Rs 5,800 crore with the SMP share of Rs 2,954 crore driving up the total. PBT rose a whopping 542 percent from Rs 39 crore in Q2 FY’12 to Rs 251 crore in Q2 FY13 while PAT shot up from Rs 24 crore in Q2 FY12 to Rs 138 crore in Q2 FY’13, a phenomenal 467 percent.

There was significant improvement in EBITDA (by 160 basis points) from 8.3 percent to 9.9 percent due to both the SMP and SMR revenues.

Driving this growth have been the overseas markets where SMG has 60 manufacturing facilities out of its total 139 plants. “We have consistently increased our content per car which aided by our depth and reach across markets and customers has resulted in overall increase in sales. This improvement in performance is mainly because of expanding sales and overall improved performance of the acquired companies Samvardhana Motherson Reflectec and Samvardhana Motherson Peguform,” says G N Gauba, CFO, MSSL.