EUR 120.00 For Business Accounts Only

MOSL: MOTHERSON SUMI (Buy)-EBITDA in-line-SMP greenfield plants stabilizing, breakeven by end-FY20

MOTHERSON SUMI: EBITDA in-line; SMP greenfield plants stabilizing, breakeven by end-FY20

(MSS IN, Mkt Cap USD4.3b, CMP INR97, TP INR140, 44% Upside, Buy)

 

• revenue grew ~14% YoY to ~INR167.9b (our estimate: INR168.6b) in 1QFY20, led by the Reydel consolidation and the better-than-estimated performance at India and SMP. EBITDA declined 11% YoY to ~INR12.6b (in-line). Higher depreciation and interest cost (partly due to the Ind-AS 116 impact and the FX loss) led to ~25% decline in adj. PAT to INR3.3b (our estimate: INR4.2b).
• SMP revenue grew 35% YoY to EUR1.1b (our estimate: EUR990m), driven by the Reydel consolidation and the contribution from greenfield plants (excl. both, revenues were down ~7% YoY). EBITDA margin shrank by 360bp YoY (+70bp QoQ) to 2.6% (our estimate: ~2.5%) on a reported basis and by 110bp YoY to 8.6% to a like-to-like basis.
• SMR revenue declined 0.2% YoY to EUR402m (in-line); EBITDA margin was down ~30bp YoY to 10.9% (in-line).
• PKC revenue grew 10.5% YoY to EUR327m (our estimate: ~EUR340m); EBITDA margin was up 60bp YoY to ~10.1% (our estimate: 9.8%).