The Hindu Business Line : Sundram Fasteners Q1 net flat at Rs 18 cr

Loss due to the rupee's depreciation resulted in a Rs 9.80-crore burden on the Sundram Fasteners' bottomline for the first quarter of the current year. Exchange loss on foreign currency loans was Rs 23 lakh in the corresponding quarter of last year.

Principally because of this, the company had to report a flat net profit of Rs 18.02 crore (against Rs 17.34 crore in the corresponding period last year), although turnover increased close to Rs 40 crore to Rs 291.28 crore.

However, a senior official of the company noted that the depreciation of the rupee also helped raise export realisation. Export sales were Rs 88.21 crore against Rs 72.56 crore previously.

Profit before interest, depreciation and tax was higher at Rs 49.88 crore against Rs 37.37 crore — an increase of 33.5 per cent.

Both interest and depreciation were higher, reflecting the effect of a Rs 62-crore capital expenditure incurred last year.

Interest charges amounted to Rs 6.23 crore compared with Rs 3.53 crore previously. Depreciation was Rs 7.26 crore (Rs 6.50 crore).

Peiner acquisition

Meanwhile, Sundram Fasteners' annual report for 2005-06, says that the company's acquisition of Peiner Umformtechnik GmbH cost Rs 45.10 crore.

It says that Sundram Fasteners' China subsidiary, Sundram Fasteners (Zhejiang) Ltd achieved a turnover of Rs 10.51 crore and made a loss of Rs 2.87 crore. "These are the early days of the company. It will take a few more years to break even," noted a Sundram Fasteners source.

Last year, Sundram Fasteners invested Rs 5.36 crore in a new line for producing `bearing housings' for Holset, China.

Sundram Fasteners' annual report further says that the company would invest Rs 35 crore in the new plant to be set up at Uttaranchal for the manufacture of high tensile fasteners, powder metal parts, water pumps and oil pumps. The facility would mainly cater to the requirements of Tata Motors.

Besides, the company has acquired leasehold land in the Mahindra Worldcity near Chennai to set up projects for the manufacture of a range of products for export markets. "The project is expected to be operational in 2007-08."

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