Motherson Sumi Q1 Review - All-Round Miss Due To Cost Inflation, Operating Deleverage: Motilal Oswal
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Motilal Oswal Report
Motherson Sumi Systems Ltd.’s Q1 FY22 performance was impacted by exogenous factors in all its businesses (Covid-19 in India and supply-side issues in overseas businesses), sharp copper price inflation, and non-recurring expenses at PKC.
While the near-term outlook is murky due to supply chain uncertainties, Motherson Sumi is well-positioned to benefit from cyclical recovery in its key businesses as well as from the strong order book and improving efficiencies in Samvardhana Motherson Automotive Systems Group BV.
We cut our FY22E earnings per share estimates by 8%/3%, factoring in headwinds from the semiconductor shortage as well as copper cost inflation
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