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...

Background: Motherson Sumi Systems Limited (MSSL) is one of the world's leading, specialized automotive component manufacturing companies for OEMs. MSSL was established in 1986 as a joint venture with Sumitomo Wiring Systems. MSSL is a focused, dynamic and progressive company providing customers with innovative and value-added products, services and solutions. With a diverse global customer base of nearly all leading automobile manufacturers globally, the company has a presence in 36 countries across six continents. MSSL is currently the largest auto ancillary in India and among...

MSS Q1FY21 consolidated performance missed expectations led by lower utilization impacting operating leverage. The company disclosed weaker than expected margins in key business such as SMP -8.3% (PLe -4%), SMR -2.8% (PLe +2%), PKC -4% (PLe +3%) and S/A at -26% (PLe 3%). However, from...

The Board of Directors of MSS granted in-principle approval for the re- The demerger of the Domestic Wiring Harness (DWH) business of MSS into a new company that shall have mirror shareholding as MSS and shall be listed. This merged entity would be renamed Samvardhana Motherson International Ltd The demerger of the India Wiring Harness business would not include the 50% JV with Kyungshin Industrial Motherson, which manufactures wiring Effectively, the current listed entity (MSS) would be left with the global businesses (100% of SMRPBV and PKC) and remaining India business, including the JVs. The India Wiring Harness (DWH) business would be focused on the India business, as desired by Sumitomo. Post the merger of SAMIL, the shareholding of the promoters would increase to 68.15% from 61.73% currently, with the Sehgal family controlling 50.4% and Sumitomo Wiring System owning 17.7%. Adjusted for its 33.43% stake in the listed entity (~INR129b at our fair value) and 49% stake in SMRPBV (~INR55b at 15x Jun22 EPS), the implied core business valuation works out to ~INR60b.

Believe reorganization is a long term positive for MSS. MSS board approved the proposed demerger of domestic wiring harness (DWH 57.4%/6.2% of Standalone/Consol revenues), that will be listed with mirror shareholding (likely by July-21). The board also approved merger of...

MSSL would acquire & merge promoter group (SAMIL) into itself against earlier proposal to buy out SAMIL's 49% stake in SMRP BV. Effectively, this would consolidate all the group's automotive businesses (ex-DWS) as well as other supporting businesses under the umbrella of the listed entity i.e. MSSL. MSSL would issue ~136 crore new shares, diluting equity share base by ~43% to 452 crore shares from present 316 crore shares. This would be an effective equity acquisition value of ~| 8,300 crore and an EV valuation of ~| 9,400 crore (net debt at SAMIL at ~| 1,100 crore) for an incremental...

Background: Motherson Sumi Systems Limited (MSSL) is one of the world's leading, specialized automotive component manufacturing companies for OEMs. MSSL was established in 1986 as a joint venture with Sumitomo Wiring Systems. MSSL is a focused, dynamic and progressive company providing customers with innovative and value-added products, services and solutions. With a diverse global customer base of nearly all leading automobile manufacturers globally, the company has a presence in 36 countries across six continents. MSSL is currently the largest auto ancillary in India and among...

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...

MSSL reported decent Q4FY20 performance. Standalone revenues (largely includes Indian operations) came in at | 1,735 crore (down 6% YoY), while EBITDA margins stood at 17%, up 200 QoQ on the back of savings realized in raw material costs. Consequent standalone PAT stood at | 386 crore, supported by higher other income (dividend from subsidiaries). On consolidated basis, top line in Q4FY20 came in at | 15,159 crore (down 12% YoY), while EBITDA margins stood at 9.2%, up 130 bps QoQ. Expansion in margins can be largely attributed to 130 bps gross margin expansion....

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...

Swift resumption of production in China is an encouraging development. Relatively quick recovery of plants in Europe, India and the Americas would be key for MSSL given importance of healthy capacity utilisation amid relatively large outgo on employee costs, interest and depreciation. We...

US operations continue to be normal so far. For PKC, all the facilities are running normally, although demand could decline. American operations are normal, whereas EU plants are running as usual but shutdowns are being announced. with all plants except one back to normal level of operations. While these shutdowns can hurt near-term volumes, management indicated that OEMs may make up for the current loss by reducing normal shutdowns of August (holiday season). From its suppliers' perspective, most of its key suppliers are large corporates like Sumitomo, BASF and Reliance Industries. Thus, smaller suppliers, it has visibility of alternative suppliers. The group is facing no credit squeeze from any financiers and has enough liquidity available in all operating entities. For the debt at the holdco level (SAMIL), for which there is pledge of MSS shares, management indicated that it can pay down the entire debt today (if need be) as it has sufficient cash.

total 27. Whereas other key markets like US, South America and UK hasn't seen any shutdowns so-far. We believe, significant correction presents an opportunity to buy this stock at an attractive valuation at 11x FY21 estimates. We upgrade the stock to BUY (from Accumulate) with lowered fair value to Rs115 (from Rs153) led by earning cuts and lower 16x multiple (from 18x) to...

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...

Motherson Sumi Systems Ltd (MSSL) topline witnessed decline of 5% yoy to INR 15661 cr in Q3FY20.

Motherson Sumi Systems (MSSL) reported a muted Q3FY20 performance. Total consolidated revenues in Q3FY20 were at | 15,661 crore, down 8.8% YoY. EBITDA in Q3FY20 was at | 1,236 crore with corresponding EBITDA margins at 7.9%, down 40 bps QoQ. Resultant consolidated PAT (post minority interest) in Q3FY20 came in at | 271 core, down 34% YoY. On a standalone basis, revenues declined 11.3% YoY to | 1643 crore with EBITDA margins at 17.0% (up 190 bps QoQ). Even on the subsidiaries front, the performance was weak with SMR reporting revenue of 378 million (down...

10 February 2020 MSS third-quarter performance was weak across businesses due to revenue weakness-led operating deleverage. Continued reduction in losses of SMPs greenfield plant was the only positive. EPS by 10.5%/9% to factor in near-term volume weakness across key businesses. Maintain as we see scope of twin benefit of a cyclical recovery and a sharp turnaround at the new plant. revenue/EBITDA/PAT declined ~5%/11%/23% YoY to INR156.6b/INR12.4b/INR3b. revenue increased 4% YoY, but EBITDA/PAT were down 7%/16% YoY. Standalone revenue declined 5% YoY led by copper price decline (-5% YoY) and weak PV industry (-8%). EBITDA margin was flat YoY/QoQ at 15% (est.

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.