Indian auto parts maker Samvardhana Motherson International's third-quarter profit missed estimates on Monday, as hyperinflation weighed heavily on its Argentinian business.
Samvardhana's consolidated net profit rose 19.4% to Rs 542 crore (about $65 million) for the October-December quarter, missing analysts' estimate of Rs 725 crore, per LSEG data.
Its shares fell as much as 9.7% after reporting results, before ending down 5.7%.
The net profit number included a negative hyperinflationary impact of Rs 191 crore for the Argentina business, the company said in a presentation.
Argentina's rate of price increases are now at the highest level since the start of the 1990s.
Samvardhana, which makes wiring harnesses, headlight and mirror parts, counts India, the U.S. and Germany among its top markets, which account for over half of its revenues. India's top automaker Maruti Suzuki, Volkswagen and Mercedes Benz are among its top clients.
The company entered Argentina in 2018 and has a manufacturing facility near capital Buenos Aires. Details of the Argentine business' revenue contribution were not immediately available.
Auto component makers in India have been one of the largest benefactors from automakers across the world looking to diversify their procurement of parts.
Revenue from Samvardhana's modules and polymers segment, which makes dashboard panels, rose 16% in the December quarter, driving a 27% rise in overall revenue. Its mainstay wiring harnesses business grew 22%.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Feb 12 2024 | 5:57 PM IST