Buy Motherson Sumi Wiring India; target of Rs 80: Emkay Global Financial

Emkay Global Financial's research report on Motherson Sumi Wiring India

We recently met the management at MSUMI, and visited the company’s Pune plant as well. KTAs: a) MSUMI is making a strong breakthrough in several OEMs, particularly 2 large SUV-focused players, and has emerged as the sole supplier for a number of their key upcoming models (for both ICE as well as ‘born EV’ platforms). b) Content per vehicle (CPV) would continue to grow strongly, with premiumization (up to 1.5x in SUVs vs sedans) & electrification (up to 2.4x/5x in E-PVs/E-2Ws). c) Higher localization and scale benefits (like improved manpower productivity) would help expand margins.

Outlook

We believe MSUMI offers a strong proxy play on PVs, even as the underlying PV industry faces demand moderation and EV-led disruption uncertainty; we retain BUY, with unchanged TP of Rs80 at 30x FY26E P/E (build-in unaltered 33% FY24E-26E EPS CAGR).

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