Emkay Global Financial has given Buy recommendation for Motherson Sumi with a target price of Rs. 300 in its research report issued on Jan 09, 2022
Emkay Global Financial’s report on Motherson Sumi
At its analyst call, management reiterated that the proposed restructuring exercise aligns the interests of all stakeholders, and is earnings-accretive for minority shareholders. Management re-emphasized expectations of better content per vehicle, helped by increasing EV penetration, in both the entities – MSWIL (domestic wiring harness business) and SAMIL (new name for existing listed entity after the de-merger of domestic wiring harness business and merger with parent entity). Key takeaways: SAMIL shares will trade ex-MSWIL from 14th January. The merger with the promoter entity is expected to take place on 24th January. MSWIL’s listing is expected in mid-March, subject to regulatory approvals. Led by restructuring, EPS accretion is expected for minority shareholders. In the past 12 months ending Sep’21, EPS accretion stood at ~5%.
Retain Buy with a TP of Rs300 (23x Dec’23E EPS). We expect robust growth prospects for MSS in the medium term, driven by expectations of a cyclical upturn in the underlying Auto segment in domestic/global markets and increasing content per vehicle due to premiumization/electrification.
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At 16:00 hrs Motherson Sumi Systems was quoting at Rs 239.95, up Rs 1.20, or 0.50 percent.
It has touched an intraday high of Rs 245.65 and an intraday low of Rs 238.95.
It was trading with volumes of 347,959 shares, compared to its thirty day average of 369,982 shares, a decrease of -5.95 percent.
In the previous trading session, the share closed up 2.60 percent or Rs 6.05 at Rs 238.75.
The share touched its 52-week high Rs 269.00 and 52-week low Rs 143.35 on 03 June, 2021 and 01 February, 2021, respectively.
Currently, it is trading 10.8 percent below its 52-week high and 67.39 percent above its 52-week low.
Market capitalisation stands at Rs 75,774.63 crore.