Motherson Sumi Systems - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 104; MCap: Rs. 32,843 crore)

Motherson Sumi Systems (MSSL) reported soft Q1FY21 performance, with domestic as well as global operations impacted by the pandemic.

Q1FY21 Earnings Summary

- Consolidated revenues declined by 49% YoY to Rs. 8,504 crore, with all business divisions reporting significant drop in top line. Standalone business was the biggest dragger (down 77% YoY), followed by SMR (down 51%), SMP (down 45%) and PKC (down 43%). Management commentary on the present state of affairs, however, was relatively positive - stating that 84% of plants globally are now running at >50% capacity and that it sees strong demand revival in Q2FY21E

- The company posted loss at consolidated EBITDA level of Rs. 630 crore amid sequential increase in all cost heads. All business segments reported EBIT loss for the quarter, however largest division i.e. SMP encouragingly was able to contain the sequential slide relatively well. EBITDA losses at SMP greenfield plants were at the lowest level in the past five quarters

- Consequent consolidated loss at PAT level came in at Rs. 810 crore vs. profit of Rs. 332 crore in the base quarter

MSSL, courtesy its high global exposure (outside India constituting ~88% of its consolidated sales) remains susceptible to geographical demand risks as well as foreign exchange risk. Pace of ramp up in SMP greenfield plants as well as continuation of business de-risking approach (in clients, components and countries) are key monitorables.

Shares of MOTHERSON SUMI SYSTEMS LTD. was last trading in BSE at Rs.107.45 as compared to the previous close of Rs. 104.9. The total number of shares traded during the day was 2111264 in over 9240 trades.

The stock hit an intraday high of Rs. 109.3 and intraday low of 101.2. The net turnover during the day was Rs. 221787518.

Source : Equity Bulls

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