Rane Madras Ltd, a leading manufacturer of steering and suspension products, reported standalone net profit for the third quarter ended December contracted 64% to ₹7.7 crore on account of shortage of semiconductor chips and a drop in sale volume to original equipment customers.
Income from operations stood flat at ₹391 crore compared with the year-earlier period, according to a regulatory filing.
“Q3 was a challenging quarter with semiconductor shortage impacting the supply chain across served customers and geographies,” said L. Ganesh, chairman, Rane Group.
“Also, commodity prices remained at elevated levels impacting profitability. The U.S. subsidiary sustained the improved operational performance. We hope the third wave of coronavirus in India does not adversely impact the demand environment.”
According to him, sales volume to OE customers declined by 4% mainly on account of a significant drop in sales to the farm-tractor segment on account of unseasonal rains and higher dealer inventory. However, OE sales revenue registered a growth of about 5% on account of inflationary impact in the selling price realisation.
Sales to international customers decreased by 10%. The demand was affected due to semiconductor shortage. Sales to aftermarket customers grew 9% supported by demand pan India.Shares of company lost ₹25.55 to close at ₹393.05 on the BSE on Monday.