Samvardhana Motherson International Ltd. share price target

As far as first de-merging (domestic wiring harness) exercise is concerned, we view this as neutral from a minority shareholder's perspective as it will mirror the present shareholding of MSSL and is being largely done at the behest of its long standing technology partner i.e. Sumitomo Wiring Systems, Japan (SWS). The India wiring harness division is constituted under the MSSL standalone operations with contribution to standalone top line at 72% while contribution to consolidated topline is 8.4%. Pure play India operations, excluding exports (~| 4647 crore as of FY19), constitute...

31 January 2020 Automobiles The Board of Directors of MSS have granted an in-principle approval for re- organization of businesses within the group, which includes Demerger of the India wiring harness business into a new company having mirror shareholding as MSS and shall be listed, Consolidation of shareholding in SMRPBV by merging ~49% stake held by Samvardhana Motherson International Ltd (SAMIL) in SMRPBV into MSS. Effectively, the current listed entity (MSS-2) will be left with the global businesses (100% of SMRPBV and PKC) and the remaining India businesses including JVs. The India wiring harness business (MSS-1) will be focused on the domestic India business, as desired by Sumitomo (Refer Exhibit 1 & 6). MSSL-2 will be the global businesses + other India businesses/JVs including the wiring harness JV supplying to Hyundai. SAMIL can look at JVs. Also, MSSL-2 would not have any restriction on acquiring any car wiring harness business outside India (which was restricted so far by Sumitomo).

Motherson Sumi Systems Ltd (MSSL) witnessed a modest 5% yoy growth to INR 15924 cr in Q2FY20, which came in line with expectation considering slowdown in global automobile demand.

Motherson Sumi Systems (MSS) Q2FY20 consolidated margins were above estimates at 8.3% (PLe: 7.2%) however, standalone results were in-line. Ramp-up at Kecskemet/Tuscaloosa and efficiencies at other plant resulted in sharp improvement in SMP margins at 4.2% (+160bp QoQ, PLe: 3.2%). Going ahead with further ramp-up of both these plants, healthy order book at Eur18.4b (as of Sep-19 including new orders of Eur3.8b in 1HFY20) and SOP...

revenue grew 5% YoY to INR159.2b (v/s est. INR153.6b), drivn by PKC and SMP businesses. PAT grew 4% YoY to INR3.9b (v/s est. 1HFY20 CFO increased 533% to INR14.3b, driven by reduction in working capital while lower capex led to FCF at INR4.2b (v/s -INR10.

Motherson Sumi Systems Ltd (MSSL) is a JV between Samvardhana Motherson International (SMIL) and Sumitomo Wiring Systems, Japan (SWS). MSSL is a diversified auto parts maker with presence in automotive...

The challenging times seems to have extended for Motherson Sumi Systems Ltd (MSSL) as it witnessed 14% yoy growth to INR 16793 cr in Q1FY20.

Global auto-ancillary, marred by decline in auto volumes! MSSL is truly a global auto ancillary player with outside India constituting ~88% of its consolidates sales and India comprising the rest at 12% of sales. It has high exposure to Europe with Germany accounting for the large chunk and constituting ~23% of sales. US contribution is also at a healthy 15% of sales. Its major clients include Audi (13% of sales), Mercedes Benz (9%), Volkswagen (9%), Ford (5%), etc. Globally, there has been a downtick in auto sales volume tracking muted economic prospects amid uncertainty...

Motherson Sumi Systems' (MSS) Q1FY20 performance were in-line at Change in Estimates | Target | Reco consolidated level however, standalone margins were lower than expected at 17% (PLe: 18%). With impact of high ramp-up cost of greenfield plants and...

Consol. revenue grew ~14% YoY to ~INR167.9b (our estimate: INR168.6b) in 1QFY20, led by the Reydel consolidation and the better-than-estimated performance at India and SMP. EBITDA declined 11% YoY to ~INR12.6b (inline). Higher depreciation and interest cost (partly due to the Ind-AS 116...