After three consecutive days of losses, shares of Motherson Sumi Systems climbed 0.54 percent higher to Rs 224.35 on BSE on August 11.
The company released its June quarter scorecard on August 10 after which the stock closed with a loss of 3.36 percent on BSE.
The company reported a consolidated net profit of Rs 367.65 crore from continuing operations in the first quarter ended June 30 against a consolidated net loss of Rs 1,121.60 crore in the same quarter last year.
Consolidated total revenue came at Rs 16,157.35 crore during the June quarter of FY22 against Rs 8,348.35 crore in the year-ago period.
Brokerage maintain their view
Most brokerages maintained their views on the stock after the June quarter numbers.
Morgan Stanley has maintained an 'overweight' view on the stock, with a target price of Rs 268.
It highlighted that the Q1 result was below expectations due to the impact of greater than expected production cuts while Q2 is likely to be muted but the margin in the second half of FY22 may rebound as volume recovers.
Citi has maintained a sell call on Motherson Sumi with a target price of Rs 215.
Citi found the company's Q1 slightly ahead at EBITDA level while PAT was amplified by higher other income.
Standalone (India) results were much ahead of muted expectations. Steep fall in margin for both SMRPBV (Samvardhana Motherson Automotive Systems Group BV) and PKC is a cause of concern," Citi said. The global financial firm cut estimates for the consolidated business of the company.
As per Motherson Sumi's website, SMRPBV is a joint venture between Motherson Sumi Systems, the flagship company of Motherson Group, and Samvardhana Motherson International, the principal holding company of Motherson Group.
Brokerage firm ICICI Securities has maintained a buy call on the stock with a target price of Rs 312.
The brokerage firm expects DWH (domestic wiring harness) business to unlock value after restructuring as a strong proxy play on the electrification and hybrid theme in India.
"Robust order book coupled with premiumisation play and increasing BEV (business enterprise value) content (share of pure BEV order book at 25 percent in FY21), is likely to support the increase in content per vehicle thesis," ICICI Securities said.
With adequate capacity at current plants, program execution on its growing order book would lead to improved asset-sweating and strong RoCE across verticals, the brokerage firm pointed out.
"Motherson Sumi Systems being an OEM (original equipment manufacturer) centric supplier gets raw material cost pass-through with a lag (3-6 month), hence, gross margins are likely to normalise by Q2FY22E," ICICI Securities said.
Brokerage firm Motilal Oswal Financial Services, too, has maintained a buy call on the stock with a target price of Rs 285.
Motilal Oswal believes global supply chain disruptions are likely to be headwinds for OEM production over the near term but are expected to improve from the second half of FY22. However, the underlying demand for PVs and CVs is very strong, Motilal Oswal pointed out.
"Our positive view on Motherson Sumi remains intact due to cyclical recovery, turnaround at the greenfield plant, and the execution of SMRPBV’s strong order book. It trades at 28.8 times and 19 times FY22E and FY23E consolidated EPS," Motilal Oswal said.
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