Motherson Sumi Systems gains post Q2 results


Motherson Sumi: Good quarter, more to follow?

  Motherson Sumi Systems (MSSL) has moved higher by 9% to Rs 335 on BSE after the company reported 25% year on year (YoY) growth in consolidated net profit at Rs 361 crore for the quarter ended September 30, 2016 (Q2FY17). Analysts on an average had expected a profit of Rs 348 crore for the quarter.

Revenue grew by 15% at Rs 10,018 crore during the quarter under review against Rs 8,715 crore in the corresponding quarter of previous fiscal.

EBITDA ((earnings before interest, taxes, depreciation, and amortization) margin stood at 10.05% in Q2F17 against 10.07% in Q2FY16.

The growth was fueled by strong performance across the major product divisions and geographies. The reduction in net debt to almost 50% of debt levels as was on 31st March 2016, provided additional headroom to prepare for growth.

“Samvardhana Motherson Automotive Systems Group B.V (SMRP BV), the subsidiary of MSSL, commenced commercial execution of orders worth Rs 23,000 crore (Euro 3.09 billion approx.) during the H1FY17,” the company said in a release.

The subsidiary has won new orders worth Rs 12,000 crore (Euro 1.6 billion approx.) during the same period, which takes the total order book position to over Rs 89,000 crore (Euro 11.9 billion approx.), it added.

“SMRP BV has commenced execution of large orders at some of the new facilities, these have received tremendous response from our esteemed customers. The reduction in net debt provides additional headroom to prepare for growth,” said Vivek Chaand Sehgal, MSSL’s Chairman.

At 12:05 pm, the stock was up 6% at Rs 327 on BSE, against 1.7% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 5.7 million shares changed hands on BSE and NSE so far.