(Reuters) – Diversified products maker 3M India reported a 16% fall in its third-quarter profit on Friday, as inflationary pressures pushed costs higher, hurting margins.
The company, whose products range from “Post-it” notes to power tools, said its profit after tax fell to 1.14 billion rupees ($13.05 million) for the quarter ended December 31, compared to 1.35 billion rupees a year ago.
India’s consumer goods makers have grappled with high inflation, which spiked to 6.21% in October and remained above 5% through December, driving up the cost of key raw materials.
3M reported a 23% increase in the cost of raw materials and a 13% rise in total expenses for the quarter.
The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margins contracted by 12% compared to the previous year, negatively impacting its profitability.
However, the Scotch-Brite scrub maker has continuously raised prices across its product range in recent quarters to counter inflationary pressures, which helped revenue to grow.
It’s transportation and electronics segment, which includes automotive parts, lighting solutions, and wires and cables, posted a 10% increase in revenue, driving the company’s total revenue up 8% to 10.9 billion rupees.
3M India, the Indian arm of the U.S.-based industrial conglomerate 3M, said its revenue from safety and industrial segment, with products like face shields and construction hats, posted a 1.4% revenue fall.
Shares of the company fell 2% after posting results.
($1 = 87.3710 Indian rupees)
(Reporting by Ashna Teresa Britto; Editing by Tasim Zahid)
