MOSL: ANNUAL REPORT THREADBARE (ART) | MOTHERSON SUMI FY17: Rising CWIP weighs on RoCE
ANNUAL REPORT THREADBARE (ART) | MOTHERSON SUMI FY17: Rising CWIP weighs on RoCE
Motherson Sumi Systems’ (MSS) FY17 annual report highlights an improvement in its operating cash flows to INR38b (FY16: INR21.9b). This was primarily on account of release of working capital of INR6.6b, led by the increase in trade payables by INR19.4b (FY16: INR3.3b) and the continued practice of discounting receivables of INR18.8b (FY16: INR18b). FCF post interest remained negative at INR34.4b on account of high capex (INR27.8b) and acquisitions (INR41.1b). Consequently, debt increased to INR103b (FY16: INR60b). However, D/E was maintained at 1x with dilution and internal accruals. The PKC acquisition led to an increase in intangibles to INR40.3b, 38% of networth (FY16: INR3.4b, 6% of networth). Rising CWIP and cash weighed on RoCE, which stood at 23.5% v/s RoIC ex-CWIP at 32.9%.
Payables boost cash flows: Earnings to cash flow conversion improved to 112% (FY16: 86%). CFO grew 73% to INR38b (FY16: INR21.9b) due to the release of working capital of INR6.6b (FY16: infusion of INR9b). This was led by (a) an increase in payables by INR19.4b and (b) discounting of receivables of ~INR18.8b (FY16: INR18.0b).
Intangibles soar on PKC acquisition: MSS acquired PKC for a consideration of INR40b, recognizing INR16.4b of goodwill and INR20.5b of intangibles (including INR16.7b of customer relationship). This led to an increase in intangibles to INR40.3b, 38% of networth (FY16: INR3.4b, 6% of networth).
Motherson Sumi Systems is engaged in the manufacturing of rearview vision systems, interior and exterior modules and wiring harness. Co.'s business portfolio comprises electrical distribution systems (wiring harnesses), automotive rearview mirrors, polymer processing and tooling, elastomer processing, metal machining, and information technolgy, engineering & design. Co. also provides manufacturing support, including compressors, paint coating equipment, auxiliary equipment for injection moulding machines and automotive manufacturing engineering services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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