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| Auto ancillary industry margins up 14.7% |
| BS Reporter / Chennai Nov 09, 2009, 00:39 IST |
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Operating margins of auto ancillary industry of the southern region increased to 14.5 per cent during April-June 2009. The net profits increased by 18.4 per cent, while the net profit margin improved to 7.4 per cent compared to 6.0 per cent, according to Confederation of Indian Industry (CII) southern region’s quarterly industry and economic update.
The study stated that compared to the preceding two quarters, the overall business situation for the auto ancillary industry in the region has marginally improved. The listed auto ancillary companies in the southern region reported a 3.7 per cent decline in operating income (OI) to Rs 55.84 billion (around Rs 5,584 crore). However, operating margins in Q1FY2010 are better than what it was during the same period in the previous two fiscals. Due to reduction in operating expenses and raw material cost, there has been great increase in the profitability of tyre firms.
As for the listed automotive units in the southern region, their operating income declined to 30.4 per cent to Rs 20.08 billion (around Rs 2,007 crore). After a marginal recovery in Q4FY2009, the operating margins of listed auto companies fell to three per cent in Q1FY2010. Net profit margin of the automotive sector for the southern region fell to 0.2 per cent in Q1FY2010 compared to 1.3 per cent in Q1FY2009.
There are about 142 auto projects that are at different stages of planning and execution in the southern region, which has been a major auto hub having one third of the concentration of the auto industries in India. Among these projects, about 69 per cent of them are undertaken by Indian companies in private sector, while about 27 per cent are by foreign companies and the rest by the central government.
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