Buy Motherson Sumi Systems, target price Rs 312: ICICI Securities

ICICI Securities has buy call on Motherson Sumi Systems with a target price of Rs 312. The current market price of Motherson Sumi Systems is Rs 223.55. Time period given by analyst is one year when Motherson Sumi Systems price can reach defined target.

Motherson Sumi Systems Ltd., incorporated in the year 1986, is a Large Cap company (having a market cap of Rs 71874.58 Crore) operating in Auto Ancillaries sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 16312.13 Crore, down -4.23 % from last quarter Total Income of Rs 17033.46 Crore and up 90.74 % from last year same quarter Total Income of Rs 8551.95 Crore. Company reported net profit after tax of Rs 426.32 Crore in latest quarter.


Investment Rationale
Robust orderbook coupled with premiumisation play and increasing BEV content (share of pure BEV orderbook at 25% in FY21), is likely to support the ‘increase in content per vehicle’ thesis. With adequate capacity at current plants, Program execution on its growing orderbook would lead to improved asset-sweating and strong RoCE across verticals. The brokerage tweaks earnings estimates by -6.7%/0.7% for FY22E/FY23E respectively. It values the stock on SoTP basis and maintains BUY rating with a revised target price of Rs312/share (earlier: Rs310).

Promoter/FII Holdings
Promoters held 61.7 per cent stake in the company as of June 30, 2020, while FIIs held 17.1 per cent, DIIs 12.8 per cent and public and others 8.4 per cent.