Accumulate Motherson Sumi Systems; target of Rs 111: Prabhudas Lilladher

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Prabhudas Lilladher's research report on Motherson Sumi Systems

Motherson Sumi Systems' (MSS) Q1FY20 performance were in-line at consolidated level however, standalone margins were lower than expected at 17% (PLe: 18%). With impact of high ramp-up cost of greenfield plants and integration of SMRC subsiding, SMP's margins (2.6% in Q1FY20 v/s 1.9% in Q4FY19) are expected to gradually recover in subsequent quarters. Further, with ramp-up of Tuscaloosa and Kecskemet plant and healthy order book, SMRPBV's revenues is expected to grow at ~10% CAGR over FY19-21E. On the other hand, while management sounded cautious on prevailing demand slowdown in European auto market, it also confirmed MSS has not witnessed any decline/cancellation in orders it has received.

Outlook

We maintain 'Accumulate' with a target price of Rs111, based upon 18x Mar'21E EPS. At current market price, the stock trades at 19.7x FY20E & 15.6x FY21E Consol EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More