Vivek Chaand Sehgal, chairman, Motherson Sumi Systems, spoke about benefits related with the merger of interior components and modules manufacturer Reydel Automotive Group and impact of rupee depreciation on his company among others during an interview with Swati Khandelwal of Zee Business.
Did Reydel's merger had any impact on the company's results in the second quarter?
Acquisition of Reydel, which was completed on August 2, 2018, has helped us to increase our range in B and C segments. It adds $1 billion to our topline and is contributing to our interior portion business.
A slight pressure was felt on Samvardhana Motherson Peguform (SMP) margins in the second quarter?
The high start-up cost of two plants is something that has created the pressure. But one must not be worried about it as such pressures are felt when such big plants are commissioned. Interestingly, we will recover from the pressure on SMP margins, in next one-two quarters.
Have the international market concerns, that existed for last 3-4 quarters, come to an end?
Its impact can be analysed by having an eye on our October figures and you will get that a fall was registered in certain European companies. This concern is creating a confusion in the market, but I feel that a response time should be given to our customers and their customers. In fact, everything will settle down in the next 1-2 quarters.
Did rupee depreciation had any impact on your business?
It is just the translation loss and would have had a small impact on our local business, but we will recover it in the next three-six months from our customers.
What are your capital expenditure plans for this fiscal?
Our FY19-20 capital expenditure will revolve just around maintenance as the capital expenditure related to expansion has been invested.
