Concerns had adversely impacted our European business: Vivek Chaand Sehgal, Motherson Sumi

Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems, spoke about benefits related with Reidel merger and impact of rupee depreciation on his company among others during an interview with Swati Khandelwal, Associate Editor, Zee Business. Edited Excerpts

Q: Did Reidel's merger had any impact on the company's result in the quarter, if yes, then let us know about its contribution and future synergies with it?

A: Acquisition of Reydel, which was completed on August 2, 2018, has helped us to increase our range in B and C segments. It adds US$ 1 billion to our top line and is contributing to our interior portion business. 

Q: Slight pressure was felt on SMP margins in this quarter.
A: 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 it, the pressure on SMP margins, in next one-two quarters. 

Q: Did rupee depreciation had any impact on your business?
A: It is just translation loss and would have had a small impact on our local business but we will recover it in the next 3-6 months from our customers. 

Q: What are your CapEx plans for FY19?

A: Our FY19-20 CapEx will revolve just around maintenance as the CapEx related to expansion has been invested. 

Q: Will the new emission rules - to be effective soon - will benefit you? 

A: Smiling, such norms will not have any impact on our business as we are not into the business of engines, transmission or power. But will ask you to continue buying cars as it will add to our business. 

Q: Did the international market concerns - that existed for last 3-4 quarters - has come to an end, if not, then do you think that it will normalise in H2FY19 or not?

A: 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 so that the confusion will evaporate in itself. In fact, everything will settle down in the next 1-2 quarters. '