Moneycontrol
Feb 15, 2017 05:04 PM IST | Source: Moneycontrol.com

Hold Motherson Sumi; target of Rs 359: Edelweiss

Edelweiss recommended hold rating on Motherson Sumi with a target price of Rs 359 in its research report dated February 13, 2017.

Hold Motherson Sumi; target of Rs 359: Edelweiss


Edelweiss' research report on Motherson Sumi


Consolidated revenue, at INR 106bn (up 12% YoY), stood 3% below Street’s estimate. India business revenue, at INR 15.6bn, up 24% YoY, was 7% above estimate led by rising content per vehicle. In EUR terms, SMR and SMP maintained revenue traction clocking growth of 15% and 11% YoY, respectively. SMR margins surprised positively at 11.8%, up 220bps QoQ (our estimate of 10.8%), but SMP margin at 5.9% continued to disappoint (our estimate of 7%).


Outlook


We estimate consolidated EPS CAGR of 23% over FY16-19 with 27% RoE. We lower our FY18E EPS by 9% to factor in lower domestic margins and revised EUR-INR assumptions, and roll over to FY19E with EPS of INR 19. We maintain ‘HOLD/SU’ with TP of INR 359. At CMP, the stock trades at 18x FY19E PER.

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