Sundaram Finance Holdings Ltd has registered net profit at Rs 5.13 crore for the quarter ending June 30, 2021 up by 80 percent, the company said on Thursday. The city-based company had registered net profit at Rs 2.85 crore during the corresponding quarter previous year.

Revenue during the quarter under review grew to Rs 10.50 crore from Rs 9.30 crore registered in the corresponding quarter previous year, a company statement said here. Sundaram Finance Holdings primarily operates as a holding company, owning a portfolio of businesses engaged in automotive manufacturing including brakes, turbo chargers, ferrous castings, axles, wheels, fuel injection.

The company's significant investments include Sundaram-Clayton, WheelsIndia, IMPAL and Brakes India, Turbo Energy. The performance of the companies was below the results as compared to FY2019-20 due to the downturn in the automotive industry and also due to the impact of the COVID- 19 outbreak.

"We remain optimistic on the recovery and growth of the automotive sector in the medium term and consequently we expect a recovery in the future results of the company", Sundaram Finance Holdings Ltd Director, Harsha Viji said.

According to company chairman T T Srinivasaraghavan, the downturn was an opportunity to further consolidate the long-term holdings in the portfolio.

"We have brought out foreign partners in Wheels India and Brakes India with an investment of Rs 450 crore", he said.

The company increased its stake in Wheels India Ltd, a steel wheel manufacturer for cars and commercial vehicles, from 13.58 percent to 23.28 percent through an acquisition of an additional 9.70 percent from its foreign partner Titan Europe for Rs 100 crore.

The combined holding of Indian promoters in Wheels India stands at 57.53 percent. During the first quarter of the current financial year, Sundaram Finance Holdings completed the acquisition of an additional 7.71 percent stake in Brakes India Pvt Ltd for a consideration of Rs 350 crore from the foreign partner ZF International, taking its stake from 6.67 percent to 14.38 percent, making the Indian promoters hold 100 percent stake.

The investment was funded through a rights issue which was completed on June 11, 2021, it said. SF Holdings also consolidated its shareholding in its foundry portfolio by acquiring 6.84 percent stake in Flometallic India Pvt Ltd and consequently, its stake increased to 46.84 percent from 40 percent.

Flometallic India operates ferrous metal foundries in Gujarat and primarily supplies automotive components for domestic and overseas markets. SF Holdings on the occasion announced its entry into the carbon fibre market by investing Rs 23.71 crore into the carbon fibre business of Italy-based Mind S.r.l for a stake of 40.6 percent.

"The carbon fibre market, though nascent in India now, has solid potential to grow in the long term and the technology and expertise from Mind S.r.L will help position SF Holdings well in the market", company director Srivats Ram said. "In the long term, the carbon fibre operations could get partially shifted to India, which is expected to decrease manpower cost and expand margins", he said.