Motherson Sumi Q1 Review - Challenging Quarter; Margins Impacted By One-Time Costs: ICICI Securities
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ICICI Securities Report
Motherson Sumi Systems Ltd.’s Q1 FY22 operating earnings missed consensus estimates as Ebitda margin came in at 7.6% (down 260 basis points QoQ) largely due to the one-time impacts in PKC (~€20 million/80 basis points drag).
However, Samvardhana Motherson Reflectec / Samvardhana Motherson Peguform performance was in-line with consensus estimates aided by greenfield plants improvements (we expect these plants to reach profit before tax breakeven in H2 FY22E); this would drive earnings growth in FY23E.
Motherson Sumi being an original equipment manufacturer centric supplier gets raw material cost pass-through with a lag (three to six month), hence, gross margins are likely to normalise by Q2 FY22E.
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