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Last Updated : Nov 07, 2015 02:56 PM IST | Source: CNBC-TV18

'Order book at 14 bn euros+; maintain 40% RoCE 2020 target'

Motherson Sumi is on track to achieve its 2020 target of achieving 40 percent return on capital employed (RoCE), Chairman Vivek Chaand Sehgal told CNBC-TV18 in an interview, after the company declared a robust set of quarterly numbers.

Motherson Sumi is on track to achieve its 2020 target of achieving 40 percent return on capital employed (RoCE), Chairman Vivek Chaand Sehgal told CNBC-TV18 in an interview, after the company declared a robust set of quarterly numbers.

Sehgal also said the company had recieved 3.87 billion euros of new executionable orders during the April-September period and that its total order book now stood at 14 billion euros plus.

Below is the verbatim transcript of Vivek Chaand Sehgal’s interview with Sonia Shenoy & Reema Tendulkar on CNBC-TV18.

Sonia: I read your press release where you said that you have received new orders worth 3.87 billion euro between April and September. Can you tell me what is the total executionable order book of the company currently?

A: The total number would be 14 billion euro plus and this 3.87 billion euro excludes 2.2 billion euro approx that was received by Daimler for which we had made a special announcement. So, together with that in the last six months we have picked up almost close to 6 billion euro.

Reema: The other highlight of your earnings was the improvement in margins, nearly 100 basis points to 9.7 percent. What is your expectation for margins going ahead will they only improve in the second half of the year?

A: Motherson Sumi normally never guides you on margins. However, definitely under the present scenario it appears that the performance of the company, the way they are focusing on their bottomline, definitely this would be the trend. So, unless something unforeseen happens, like huge jump in the raw material cost or something like that which I don’t see happening, I don’t see any way that we are going to look worse. We are going to be better and better every quarter, every year to catch our 2020 target of 40 percent return on capital employed (ROCE).

Sonia: What about Samvardhana Motherson Peguform (SMP) – your European subsidiary, the growth has been quite strong there. Can we expect a similar trend in the second half?

A: Again and again we say that we are only reflective of exactly what our customers are asking us to do. So, we believe that everything is fine. There is no indication from the customer. We believe that we will catch or guidance for the full year.

Reema: What is your outlook for the European markets in the second half of the year? Will there be a pickup in demand and if yes which would be the key markets?

A: We are getting a very good feeling. The traction is still very strong. We don’t hear anything to the negative. We have not been advised to reduce our or tone down our production or something. In fact if anything was to reverse, some of our plants are being asked to produce more. We believe that as of now whatever we can see for the next three months, we don’t see any reduction anywhere.
First Published on Nov 6, 2015 03:09 pm
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