Higher raw material prices have led to a two per cent drop in the consolidated net profits at Rs 139 crore for the quarter ended March 31, 2011 for auto component maker Motherson Sumi Systems Ltd (MSSL).

Consolidated net sales, however, rose 20 per cent to Rs 2,318 crore on the back of a strong growth in demand from the domestic automakers.

For the full fiscal 2010-11, the consolidated net profit rose 61 per cent to Rs 391 crore, while the net sales were up 22 per cent to Rs 8,176 crore. Domestic sales rose 59 per cent (Rs 3,252 crore), while international sales were up six per cent (Rs 4,924 crore).

Last year, MSSL had undertaken major restructuring, which included shutdown of a German plant and consolidating two plants in Australia into one. SMR was acquired from Visiocorp on March, 2009.

“This is the first full-year after restructuring for Samvardhana Motherson Refletec (SMR), which is now part of the consolidated numbers. It is going in the right direction and working on new clients and projects,” said Mr G.N. Gauba, CFO, MSSL.

MSSL will be spending Rs 650 crore in 2011-12 towards setting up new plants in Brazil, Thailand and Hungary, besides expanding capacities at various domestic plants such as Noida, Chennai, Haldwani and Bangalore.

“About half of the investment will be for the international operations. The Hungary plant should start operations in second quarter of this year, while Brazil would start by January-March, 2012. We're also on the lookout for acquisitions in our core auto component business,” said Mr Gauba.

The company's Board has also approved the merger of Sumi Motherson Innovative Engineering with itself from April 1, 2011.

MSSL shares at the BSE were up 1.41 per cent at Rs 226.40 on Wednesday.

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