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

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

MSUMI reported another quarter of strong performance, with revenue /EBITDA/PAT growth of 20%/39%/38% YoY. Continued premiumization trend (incl. SUV shift) and electrification have been key growth drivers, per Management. Backed by new order wins in both, ICE and EVs, MSUMI is adding 2 more facilities with up to 15% capacity rise and production starting from 1QFY25 (major ramp up 2HFY25 onwards). With market-share loss within MSIL now behind (Exhibit 3), break-through in 2 large SUV-focused OEMs and the EV-shift will help sustain the robust performance (even as PV industry growth is moderating).

Outlook

We expect 21%/28%/33% rev./EBITDA/PAT CAGR over FY24- 26E. We maintain BUY with unchanged TP of Rs80/sh, at 30x FY26E PER (refer to our report, Strong proxy play on PVs).