MOSL: MOTHERSON SUMI (Buy)-Above est.-Beat led by SMP/PKC but India a big disappointment
Motherson Sumi: Above est.; Beat led by SMP/PKC but India a big disappointment
(MSS IN, Mkt Cap USD5.9b, CMP INR135, TP INR167, 24% Upside, Buy)
- revenue grew 5% YoY to INR159.2b (v/s est. INR153.6b), drivn by PKC and SMP businesses. Consol. PAT grew 4% YoY to INR3.9b (v/s est. INR3.4b). 1HFY20 revenue/EBITDA/PAT grew 9.5%/-5%/-12%. 1HFY20 CFO increased 533% to INR14.3b, driven by reduction in working capital while lower capex led to FCF at INR4.2b (v/s -INR10.3b in 1HFY19).
- India business disappointed with revenue declining 17% YoY, partly impacted by pass through of lower copper prices (-7% YoY). EBITDA margins declined 170bp YoY (-190bp QoQ) to 15.1% (v/s est. 16.6%). PAT declined 36% YoY to INR1.8b (v/s est. INR2.5b).
- SMP sales grew 20% YoY to EUR1.01b (v/s est. EUR0.97b), led by greenfield plants & Reydel. EBITDA margins were stable YoY (+160bp QoQ) to 4.2% (v/s est. 2.5%). Ex the green-field plants and Reydel, revenues declined 1% to EUR660m. EBITDA margin was at 9.8% (+50bp YoY, +120bp QoQ).
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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