Force Motors posts Q3 profit on solid demand for PVs

Q3 Result: Automotive major Force Motors reported a fourth straight quarterly profit on February 12, aided by strong demand for its multi-seater passenger vehicles (PVs) that are also used as school buses and ambulances, sending its shares up 5 per cent.

The company, which also makes engines for BMW and Mercedes vehicles in India, posted a consolidated net profit of $10.3 million in the third quarter, compared with a year-ago loss of above $12 million.

Until the year-ago quarter, the automaker had posted a string of losses after the Covid19 induced pandemic and its fallout dented demand.

Segment-wise sales

Industry-wide commercial vehicle sales rose 3.5 per cent in the latest October-December quarter, while passenger vehicles sales jumped 8.3 per cent to a record high, which analysts said was due to festive season demand.

Force Motors' domestic sales jumped 10.6 per cent in the quarter. Last week, Ashok Leyland posted a bigger-than-expected profit on strong demand for its trucks and buses.

While Force Motors gets about 48 per cent of its revenue from vehicle sales, about 36 per cent comes from contract engine manufacturing, according to its last annual report.

The company, which also makes tractors and off-roaders, said revenue from operations rose 29.7 per cent to Rs 16.92 billion in the latest quarter.

The company's cost of materials, which forms the majority of total expenses, rose 19.5 per cent.

Force Motors' shares rose about 5 per cent after the results were out.