172@29@17@151!~!172@29@0@53!~!|news|business|stocks|buy-motherson-sumi-systems-target-of-rs-115-emkay-global-financial-5511981.html!~!|controller|infinite_scroll_article.php
Moneycontrol
Financial Freedom Offer: Subscribe to Moneycontrol Pro and grab benefits worth ₹15,000/-
Last Updated : Jul 06, 2020 01:28 PM IST | Source: Moneycontrol.com

Buy Motherson Sumi Systems; target of Rs 115: Emkay Global Financial

Emkay Global Financial is bullish on Motherson Sumi Systems has recommended buy rating on the stock with a target price of Rs 115 in its research report dated July 05, 2020.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on Motherson Sumi Systems


The restructuring exercise proposes to create a separate entity for the domestic wiring harness business (new company DWH), and a merger of parent entity SAMIL into MSS to bring in the remaining 49% SMR PBV stake and other auto/non-auto businesses. The proposed share swap implies a valuation of ~Rs244bn for SAMIL. The transaction would be EPS dilutive on our estimates, and to be EPS accretive by FY22E, a strong turnaround would be needed in SMR PBV and SAIML’s auto/non-auto businesses. The revised structure aligns interests of all stakeholders and creates a platform for future growth through both inorganic and organic routes. Reduced stake of Sumitomo Wiring Systems (SWS) in MSSL will allow to pursue acquisition opportunities more aggressively.



Outlook


A shift to this new platform is a step toward the company’s Vision 2025 – revenue target of USD33-35bn with ROCE of 40%. Retain Buy with a TP of Rs115, based on 20x FY22E EPS. We have EW stance in sector EAP.




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.

First Published on Jul 6, 2020 01:28 pm
Sections