The slowdown witnessed by the automobile industry, particularly Utility Vehicle (UV) segment, has led to a 19 per cent decline in Indian sales for Mahindra Forgings Ltd (MFL).
The company is into the production of engine and chassis forged components for commercial and passenger vehicles and other non-automotive products.
The company, earlier a subsidiary of Mahindra & Mahindra Ltd, ceased to be so and has instead become a subsidiary of Participaciones Internacionales Autometal Dos, S.L. (PIA 2), which on October 4 had acquired shares from M&M aggregating to 50.81 per cent of the diluted equity capital.
CIE Automotive, which has its headquarters in Bilbao-Spain, is a global supplier of components and sub-components for the automotive industry.
Net profit, revenue
In its filings with the stock exchanges, Mahindra Forgings said that its earnings during the second quarter of 2013-14 on a standalone basis were Rs 95 crore, a decline of 19 per cent compared with Rs 117 crore during the second quarter of last year, essentially because of the slowdown in automobile industry.
The net profit was Rs 4 crore (Rs 10 crore). European revenue was €68 million against €67 million in Q2 last year.
On a consolidated basis, revenues stood at Rs 645 crore (Rs 565 crore) and PAT at Rs 16 crore (loss of Rs 19 crore).
Share purchase agreement
The company said that following the share purchase agreement signed in June 2013, Participaciones Internacionales Autometal Dos, S.L. (PIA 2), had acquired equity stake aggregating to 50.81 per cent of fully paid diluted equity share capital, making it a promoter of the company along with the existing promoter (M&M).
Consequently, MFL ceased to be a subsidiary of M&M and has become a subsidiary of PIA 2 with effect from October 4. After receiving requisite approvals, the company's name would be changed as Mahindra CIE Automotive Ltd (MCAL).
Utility vehicles production
Giving an overview of the automobile industry in the country, the company said that in the second quarter of this year, UVs production declined 6 per cent compared to the same quarter in 2012-13.
In the first half of this year, the fall in UVs production was up to 1 per cent compared to the same period last year. While the production of passenger vehicles (cars and UVs) had come down by 10 per cent in Q1FY14, it increased by 8 per cent in the second quarter of this year compared to the respective corresponding quarters of last year.
Overall, manufacture of passenger vehicles had fallen marginally by up to 1.5 per cent in the first half of this year compared to the same period last fiscal.
‘Customer’s platform mix’
Mahindra Forgins said that because of its “existing customer’s platform mix’’, it had witnessed a “larger drop in sales’’ during Q2 with the customer programmes of M&M, Tata Motors Ltd and Maruti Suzuki Ltd contributing to the drop.
The company expected the UV market to continue to experience flat growth, while the car market is slowly recovering and taken together the “overall passenger vehicle market will remain flat in the next quarter’’.
MFL, which targeted the heavy truck segment in Europe, said data on heavy truck (>6T) registrations in Germany for FY14 indicated a fall of 4 per cent over the corresponding period last year and expected the market conditions to be flat in the next quarter.
Shares of Mahindra Forgins declined by Rs 1.65 to Rs 38.10 on the NSE with a trading volume of 3.47 lakh shares.
The company is into the production of engine and chassis forged components for commercial and passenger vehicles and other non-automotive products.
The company, earlier a subsidiary of Mahindra & Mahindra Ltd, ceased to be so and has instead become a subsidiary of Participaciones Internacionales Autometal Dos, S.L. (PIA 2), which on October 4 had acquired shares from M&M aggregating to 50.81 per cent of the diluted equity capital.
CIE Automotive, which has its headquarters in Bilbao-Spain, is a global supplier of components and sub-components for the automotive industry.
Net profit, revenue
In its filings with the stock exchanges, Mahindra Forgings said that its earnings during the second quarter of 2013-14 on a standalone basis were Rs 95 crore, a decline of 19 per cent compared with Rs 117 crore during the second quarter of last year, essentially because of the slowdown in automobile industry.
The net profit was Rs 4 crore (Rs 10 crore). European revenue was €68 million against €67 million in Q2 last year.
On a consolidated basis, revenues stood at Rs 645 crore (Rs 565 crore) and PAT at Rs 16 crore (loss of Rs 19 crore).
Share purchase agreement
The company said that following the share purchase agreement signed in June 2013, Participaciones Internacionales Autometal Dos, S.L. (PIA 2), had acquired equity stake aggregating to 50.81 per cent of fully paid diluted equity share capital, making it a promoter of the company along with the existing promoter (M&M).
Consequently, MFL ceased to be a subsidiary of M&M and has become a subsidiary of PIA 2 with effect from October 4. After receiving requisite approvals, the company's name would be changed as Mahindra CIE Automotive Ltd (MCAL).
Utility vehicles production
Giving an overview of the automobile industry in the country, the company said that in the second quarter of this year, UVs production declined 6 per cent compared to the same quarter in 2012-13.
In the first half of this year, the fall in UVs production was up to 1 per cent compared to the same period last year. While the production of passenger vehicles (cars and UVs) had come down by 10 per cent in Q1FY14, it increased by 8 per cent in the second quarter of this year compared to the respective corresponding quarters of last year.
Overall, manufacture of passenger vehicles had fallen marginally by up to 1.5 per cent in the first half of this year compared to the same period last fiscal.
‘Customer’s platform mix’
Mahindra Forgins said that because of its “existing customer’s platform mix’’, it had witnessed a “larger drop in sales’’ during Q2 with the customer programmes of M&M, Tata Motors Ltd and Maruti Suzuki Ltd contributing to the drop.
The company expected the UV market to continue to experience flat growth, while the car market is slowly recovering and taken together the “overall passenger vehicle market will remain flat in the next quarter’’.
MFL, which targeted the heavy truck segment in Europe, said data on heavy truck (>6T) registrations in Germany for FY14 indicated a fall of 4 per cent over the corresponding period last year and expected the market conditions to be flat in the next quarter.
Shares of Mahindra Forgins declined by Rs 1.65 to Rs 38.10 on the NSE with a trading volume of 3.47 lakh shares.
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