**Motherson Sumi - Q4 FY20 (Audited –Cons)**
Total revenue from operations 15,159 Cr
17,169 Cr (-11.71%) YoY | 15,661 Cr (-3.22%) QoQ
Year ending revenue: 63,536 Cr Vs. 63,522 Cr (0.02%)
Net Profit of 135.6 Cr
429.3 Cr (-68.58%) YoY 340.3 Cr (-60.43%) QoQ
Year ending Net profit: 1,294.4 Cr Vs. 2,098.1 Cr (-41.11%)
EPS (in Rs.) 0.58
1.30 YoY | 0.86 QoQ
Year ending EPS: 3.71 Vs. 5.11
View: Result is above expectation. Although YoY revenue and profit both have declined but EBITDA and margin improved in this quarter.
**Business Updates & Highlights**:
Q4FY20 EBITDA is around INR 1,355 Cr Vs. 1,270 Cr in Q4FY19 therefore up by 7% in YoY and FY20 EBITDA is around INR 5,252 Cr Vs. 5,397 Cr in FY19 therefore down by marginally at 2.7%.
Q4FY20 EBITDA margin is around 9.1% Vs. 7.5% in Q4FY19. FY20 EBITDA margin is around 8.4% Vs. 8.6% in FY19.
Robust Order Book of Rs. 107,122 crores (Euro 13.6 billion) at SMRP BV level; New orders worth Rs. 43,321 crores. (Euro 5.5 billion) won during the year, while orders worth Rs. 79,554 crores (Euro 10.1 billion) went into execution.
Q4FY20 Export turnover is around INR 13,208 Cr Vs. 15,082 Cr in Q4FY19 declined by 12% in YoY. FY20 export turnover is around INR 55,945 Cr Vs. 55,144 Cr in FY19 therefore up by 1.4%.
ROE and ROCE is around 15% and 17% respectively and book value per share is around INR 32 and share is currently trading at 3.1x of its book value. Company is currently trading at annualized PE of around 28 which is high as per industry benchmark. Promoter holding is around 61.7% in the company which is strong and stable and promoter has pledged around 2,453 Cr worth of shares. FIIs, Mutual fund hold hold around 15.5% and 11.2% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 6,352 Cr Vs. 4,312 Cr as of March 2019. Debt as of March 2020 is around INR 11,790 Cr Vs. 11,534 Cr as of March, 2019.
Position: Share strong support price is INR 80. Long term investor should continue with the company based on their risk appetite.
**Share View**: Share price high 151 (52 week) and now 101 within 2 month company share price recovered from low 48 to 101. Motherson Sumi Systems Limited (MSSL) is one of the world’s leading specialized automotive component manufacturing companies for OEMs. MSSL was established in 1986 as a joint venture with Sumitomo Wiring Systems and was listed in 1993 on BSE and NSE in India. The company has a presence in 41 countries across five continents. MSSL is currently the largest auto ancillary in India and among the Fab 50 companies of India by Forbes magazine. MSSL is the flagship company of the Motherson Group, ranked 21st among global automotive suppliers by Automotive News.
Opportunities: Share is currently at beaten down value. Despite automobile sector sluggish growth and lockdown happened in last week of March company has managed its topline and bottom line growth and also improved the EBITDA margin. Robust order book.
Risk: Automobile sector sluggish growth for past 2-3 years impact the direct business of motherson sumi especially coronavirus pandemic was already impacting China and parts of Europe. Export which is around 88% of their business continuously declined.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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