Moneycontrol PRO
HomeNewsBusinessStocksBuy Motherson Sumi Systems; target of Rs 139: Emkay Global Financial

Buy Motherson Sumi Systems; target of Rs 139: 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 139 in its research report dated November 10, 2020.

November 11, 2020 / 14:00 IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on Motherson Sumi Systems

Q2FY21 EBITDA margin expanded 120bps yoy to 10%, above the estimate of 9.1%, owing to better SMP margin. The positive highlight was a turnaround in SMP’s new Greenfield plants, due to better scale and cost reduction efforts. SMR PBV order-book is healthy at EUR13.1bn, relating to Europe, Americas and Asia regions. These orders would to be serviced from existing plants, and no new Greenfield investments are required. We expect average FCFs at Rs23bn/year over FY21-23E. The ongoing restructuring exercise remains on track, and this revision in organization structure is a key step toward the company's Vision 2025 − revenue target of USD36bn with ROCE of 40% vs. 2020 revenue of USD12bn and adjusted ROCE of 25%.

Outlook

Led by better margins in SMP, we upgrade FY21-23 EBITDA estimates by 4-7%. Following the revision, we expect EBITDA CAGR at 14% over FY20-23E. Retain Buy with a TP of Rs139 (Rs133 earlier), based on 20x FY23E 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.

Broker Research
first published: Nov 11, 2020 02:00 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Subscribe to Tech Newsletters

  • On Saturdays

    Find the best of Al News in one place, specially curated for you every weekend.

  • Daily-Weekdays

    Stay on top of the latest tech trends and biggest startup news.

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347