ICICI Direct has given Hold recommendation for Motherson Sumi with a target price of Rs. 225 in its research report issued on Feb 16, 2021
ICICI Direct’s research report on Motherson Sumi
Motherson Sumi’s (MSSL) Q3FY21 results were strong across the board. Net consolidated sales (including domestic wiring harness, DWH) rose 17.7% YoY to Rs 18,440 crore (SMR up 1.9%, SMP up 4.6%). Margins came in at 10.8%, up 135 bps QoQ on operating leverage benefits amid flat gross margin performance. Sharp uptick in profitability at key subsidiary SMP (margins up 230 bps QoQ to 9.5%) was the key highlight. EBITDA for the quarter were at Rs 1994 crore with ensuing PAT at Rs 799 crore, up 195% YoY.
We retain HOLD on the stock valuing it at Rs 225 (earlier Rs 165), 28x P/E on FY23E.