Motherson Sumi Wiring India Ltd. share price target

Motherson Sumi Wiring India (MSUMI) continued to outperform the underlying industry driven by healthy content growth and new business execution.

Motherson Wiring’s (MSUMI’s) 1QFY25 result was below estimate, mainly due to start-up costs of two new plants, resulting in lower-than-estimated EBITDA/PAT of INR2.4b/INR1.5b (est. INR2.7b/INR1.8b).

MSUMI reported another quarter of strong performance, with revenue
/EBITDA/PAT growth of 20%/39%/38% YoY. Continued premiumization trend
(incl. SUV shift) and electrification have been key growth drivers, per
Management.

MSUMI reported another quarter of strong performance, with revenue
/EBITDA/PAT growth of 20%/39%/38% YoY. Continued premiumization trend
(incl. SUV shift) and electrification have been key growth drivers, per
Management.

Motherson Sumi Wiring India (MSWIL)’s Q2FY24 EBITDAM came in at a five-quarter high of 11.8%, and was up ~135bps QoQ, mainly driven by operating leverage with ~13% revenue growth QoQ. With a rich product mix from its key PV clients, MSWIL saw strong value growth set against a single-digit volume growth environment.

Motherson Sumi Wiring India’s (MSWIL) Q1FY24 EBITDAM at 10.4% was down ~80bps QoQ, largely due to annual wage inflation. Gross margin improved 120bps QoQ though it was in line with past 4-quarter mean levels, and had no benefit of any reduction in input commodity costs.

Motherson Sumi Wiring India’s (MSWIL) Q4FY23 EBITDAM at 11.2% was up 62bps QoQ, driven by operating leverage with revenues rising 11% QoQ. Gross margin surprised negatively with ~260bps QoQ decline (lowest since MSWIL got demerged) due to a combination of change in mix, copper price fluctuations, adverse currency hedges, etc.

Motherson Sumi Wiring India’s (MSWIL) Q3FY23 EBITDAM at 10.6% was 100bps lower than expected and 70bps higher QoQ as, despite ~200bps QoQ gain in GM, 8% QoQ lower revenues exerted a negative impact. In the reported numbers, ~60bps impact on EBITDAM was due to one-offs in the form of forex loss and cost of software upgrades.

Motherson Sumi Wiring India Limited (MSWIL) is a beneficiary of Indian automotive
premiumisation and electrification other than its volume growth being correlated to long-term OEM volume CAGR of ~6-7%.