PREVIEW-Auto parts cos to see costs pinch from Q1 profits

MUMBAI, July 21 (Reuters) - Major Indian auto parts makers are seen reporting marginal-to-modest profits in the June quarter with rising input costs gnawing into margins.

Amtek Auto Ltd (AMTK.BO: Quote, Profile, Research) and Motherson Sumi Systems (MOSS.BO: Quote, Profile, Research) are seen posting a marginal rise in profit, while Bharat Forge (BFRG.BO: Quote, Profile, Research) may see profit fall 24 percent, a Reuters poll of analysts showed. [ID:nBOM131743]

Broadly, the sector is expected to deliver a moderate set of numbers in the first quarter of 2009 due to the slowdown in overall auto demand and input cost pressures, Angel Broking said in a research note.

Besides, original equipment manufacturers (OEMs) are turning to alternative component sourcing from low cost centres like China, Aniket Mhatre, analyst with Prabhudas Lilladher, said.

Rising input costs could not be passed on fully to the OEMs and this would impact margins, said Angel Broking analyst Vaishali Jajoo.

Automobile sales were up 8 percent in the April-June quarter mainly because of a low base last year, but are expected to be flat or down sequentially for the next few months on scarce and more expensive financing, according to the Society of Indian Automobile Manufacturers.

The BSE Auto Index has fallen 37 percent in 2008, outpacing the benchmark BSE index .BSESN that fell about 33 percent in the same time.

But firms like Amtek Auto will benefit from acquisitions made in 2007, analysts said.

Amtek Auto acquired U.K's Triplex-Ketlon Group for $40 million in November, and had said it would bring in additional revenue of $70 million to $80 million annually.