- 01 Nov 2022
- ICICIdirect Research
MOTHERSON SUMI WIRING POSTS MUTED Q2FY23 RESULTS
MSUMI - 64 Change: -0.37 (-0.57 %)News:
Net sales for the quarter came in at Rs 1827 crore, up 10% QoQ. EBITDA for the quarter stood at Rs 180.8 crore down 10.8% QoQ with corresponding EBITDA margins at 9.9%, down ~220 bps QoQ. PAT in Q2FY23 stood at Rs 116.5 crore, down 7.6% QoQ
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Company’s performance in terms of topline was broadly on expected lines, however disappointment was witnessed on the margins front. Muted margin performance was on account of decline in gross margin which declined 130 bps QoQ & was further aggravated by employee expense which grew 90 bps QoQ. Part of rise in input costs is explained by initial ramp up costs involved as company commissioned new facilities in Bengaluru and Chennai resulting into additional manpower requirement while the other part is due to delay in passing the incremental costs incurred to customers. However, over the long term, we continue to like the stock given the tailwinds of increasing wiring harness content amidst electrification and increase in electronic content in vehicles and superlative return ratios profile (~50%)
Impact:
Neutral