- 05 Dec 2022
- ICICIdirect Research
CONTENT INCREASE INVESTMENT THESIS INTACT IN MOTHERSON SUMI WIRING INDIA
MSUMI - 67 Change: -0.78 (-1.14 %)News:
The company held an analyst meet at its Noida corporate headquarters on Saturday (December 3, 2022) wherein it reiterated its commitment towards US$36 billion revenue target by FY25 with 40% RoCE and 40% dividend payout. It counts the domestic wiring business (MSWIL) as an integral part of this vision
View:
As part of the meet, key takeaway for domestic wiring harness business include: (i) 1.5x wiring harness content in an SUV vs. an hatchback car (ii) 1.2x wiring harness content in a top variant of PV model vs. the base variant (iii) 1.1x wiring harness content in a top variant 2-W vs. base variant (iv) 2.4x wiring harness content in an electric PV vs. ICE driven PV and (v) 8x wiring harness content in an electric 2-W vs. ICE powered 2-W. Hence, the company remains a key beneficiary of content increase due to premiumisation, electrification and shift in consumer preference for SUVs. With the leadership position in the domestic wiring harness segment and healthy 25%+ return ratios profile, we continue to remain positive on the stock
Impact:
Positive