Q3FY21 Result Update - Motherson Sumi Systems - ICICI Direct

Motherson Sumi's (MSSL) Q3FY21 results were strong across the board. Net consolidated sales (including domestic wiring harness, DWH) rose 17.7% YoY to Rs. 18,440 crore (SMR up 1.9%, SMP up 4.6%). Margins came in at 10.8%, up 135 bps QoQ on operating leverage benefits amid flat gross margin performance. Sharp uptick in profitability at key subsidiary SMP (margins up 230 bps QoQ to 9.5%) was the key highlight. EBITDA for the quarter were at Rs. 1994 crore with ensuing PAT at Rs. 799 crore, up 195% YoY.

Valuation & Outlook

We build ~81% PAT CAGR for MSSL in FY21E-23E (albeit on low base). We note the smart upswing in SMP greenfield performance and remain excited about the company's larger picture focus on (i) increased content per car & (ii) profitable growth. However, with large part of vision 2025 at MSSL involving big ticket acquisition that has an element of uncertainty, we retain HOLD on the stock valuing it at Rs. 225 (earlier Rs. 165), 28x P/E on FY23E.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MothersonSumi_Q3FY21.pdf

Shares of MOTHERSON SUMI SYSTEMS LTD. was last trading in BSE at Rs.210.7 as compared to the previous close of Rs. 197.25. The total number of shares traded during the day was 8743416 in over 44419 trades.

The stock hit an intraday high of Rs. 221 and intraday low of 204.1. The net turnover during the day was Rs. 1863179591.

Source : Equity Bulls

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