Samvardhana Motherson International Ltd. share price target

Growth challenges persist; business de-risking holds key! The domestic as well as global auto industry continues to undergo challenging times amid a host of changes on the regulatory (tighter emission & WLTP norms), technological (electric & hybrid vehicles) and demand (shift away from diesel) fronts. This makes for a volatile operational landscape in the case of MSSL, which is exposed to developments in multiple geographies and segments. To combat this, the company remains diligently focused on de-risking operations through its 3CX15' initiative whereby it...

Motherson Sumi (MSS) reported a subdued Q4FY19 consolidated revenue grew 11% YoY, EBITDA margins dipped 250bps to 7.2%, while adj. PAT dropped 23% to Rs 4.1bn. Despite a difficult demand situation globally, MSS remains confident of achieving its five-year vision (ending FY20), supported by a current order book of EUR 18.2bn. We, however, cut FY20/FY21 EPS by 13%/15% to factor in slower ramp-up of SMP plants. Rolling valuations...

Motherson Sumi Systems Ltd (MSSL) is one of the largest manufacturers of wiring harness, rear view mirrors and polymer body parts.

ICICI Securities Ltd | Retail Equity Research Motherson Sumi (MSL) reported a steady set of Q3FY19 numbers Consolidated revenues in Q3FY19 came in at | 16,473 crore (up 14.4% YoY). Net sales from the standalone business were down 4.0% YoY to | 1,722 crore. Further, among its subsidiaries, SMR revenue grew 1.5% YoY to 398 million (~| 3,270 crore) while SMP revenue increased 10.7% YoY to 993 million (~| 8,160 crore) Revenue from PKC operations grew 8% YoY to 292 million...

revenue acquisition, PKC (+8% YoY in USD terms) and currency tailwinds. S/A revenue declined 4% YoY, led by slowdown in the domestic auto industry and the lagged impact of copper price pass-through. SMP revenue was down ~2.6% YoY in EUR terms (like-to-like) due to the WLTP impact. YoY contraction in SMP margin due to negative operating leverage and (b) 120bp YoY contraction in S/A margin. Adj. PAT grew just 6% YoY to INR3.9b 13%/14%/3% YoY. (a) WLTP regulations impacted the SMP business, resulting in weak revenues for 3QFY19; expect WLTP impact for the next two quarters as well. (b) No change/cancellation in orders/order book due to uncertain market conditions. (c) 2020 organic growth target on track; continues to look at inorganic opportunities. (d) BS6 to result in 10-15% increase in content for PVs and 2Ws. (e) Week-long strike at Audis Hungary plant to have impact on SMRPBV in 4QFY19.

Motherson Sumi Systems' (MSS) Q3FY19 performance missed our estimates, Change in Estimates | Target | Reco particularly on account of weak operating performance by its key subsidiary, SMP, owing to demand issues in Europe as well as higher start-up costs for...

revenue grew 12.6% YoY to INR151b (in-line), driven by PKC (+21% YoY) and S/A business (+7.5% YoY). SMRs revenue was flat in EUR terms. SMPs like-to- like revenue was flat in EUR terms, reflecting the impact of WLTP in Germany. Reydel (SMRC) is consolidated for two months and is part of SMP. of (a) ~200bp YoY/QoQ contraction in SMP margin due to negative operating leverage and Reydel merger, and (b) 70bp QoQ contraction in PKC margins. FY19 revenue/PAT to grow 15%/9%, implying residual growth of 17.5%/16% in 2HFY19. (a) SMPs start-up cost will go away from Jan-19. (b) New plants will take four quarters to ramp-up (in line with OEMs ramp-up) expect USD1b revenue potential of the three new plants to reflect from 2HFY20. (c) Order book stood at EUR19.5b (incl. ~EUR2b order book of Reydel), which will be taken up for execution over two years; normal life of orders is ~5 years.

ICICI Securities Ltd | Retail Equity Research Motherson Sumi's (MSL) consolidated revenues were at | 15,105 crore (up 12.5% YoY) vs. our estimate of | 14,654 crore. MSL has integrated Reydel (SMRC) business for two months with its polymer business while results are as per new accounting standard Ind-As 115'. Thus, results are not comparable. Revenues from standalone business grew 7.6% YoY to | 1,950 crore. Among its subsidiaries, SMR revenue grew 0.5% YoY to 380 million while SMP revenue...

ICICI Securities Ltd | Retail Equity Research Motherson Sumi System (MSL) made an announcement on bonus shares on September 7, 2018. The ratio was one bonus share for every two existing equity share i.e. 1:2. The record date for the same is October 31, 2018 while the ex-date for the same is today i.e. October 30, 2018. Consequently, MMF's share price, as per yesterday's closing price, has dropped to | 152.1/share from | 228.5/share. Demand concerns limit valuation upside...