Motherson Sumi stock up in morning trade on bourses

MUMBAI: Shares of auto component-maker Motherson Sumi Systems went up by 4 per cent in early trade on the bourses today as investors covered short positions after yesterday's massive sell-off in the wake of the company's announcement of a new European acquisition.

Motherson shares touched a high of Rs 240.85, up 4.33 per cent from its previous close on the NSE, while on the BSE, the scrip jumped 3.91 per cent to touch an early high of Rs 240.

In the previous trading session, the stock closed with a 3.50 per cent loss on the BSE after dropping by over 7 per cent during intra-day trade.

Motherson Sumi yesterday said it will acquire an 80 per cent stake in Germany's Peguform Group from Cross Industries AG for an undisclosed sum.

The acquisition will be carried out jointly with group firm Samvardhana Motherson Finance Ltd. Cross industries would continue to hold a 20 per cent shareholding.

According to media reports, Bank of America Merrill Lynch said the acquisition could add a significant potential upside to its price target.

"We expect the stock to trade at premium to the average one-year-forward PE of the auto sector owing to superior growth and market position," it said.

Meanwhile, the BSE 30-share Sensex was trading at 18,499.34, down 96.68 points, and the NSE's 50-share Nifty was quoting at 5,566.55, down 18.90 points, at 1045 hours.