Motilal Oswal's research report on Motherson Wiring
MSWIL's revenue growth in 2QFY26 exceeded our estimate, though PAT of INR1.6b was in line with our estimate as margins continued to be under pressure due to the impact of start-up costs of the new greenfield plants. Considering a pickup in auto demand after GST rate cuts and the ramp-up of its new greenfield plants, we estimate MSWIL to post a CAGR of 15%/20%/22% in revenue/EBITDA/PAT over FY25-28E. The company’s premium valuations at 47.2x/34.4x Y26E/FY27E EPS seem justified given its strong competitive positioning, top-decile capital efficiency, and benefits of EVs and other mega-trends in autos. Reiterate our BUY rating with a TP of INR55 (based on 36x Sep’27E EPS).
Outlook
The stock trades at 47.2x/34.4x FY26E/FY27E EPS. We believe MSUMI deserves rich valuations, given its strong competitive positioning, top-decile capital efficiency, and benefits of EVs and other mega-trends in autos. Reiterate our BUY rating with a TP of INR55 (based on 36x Sep’27E EPS).
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