Motherson Sumi Systems Ltd - SELL - TP Rs.342 - Result Update - Kotak

Motherson Sumi Systems Ltd - SELL - TP Rs.342 - Result Update - Kotak- MSSL's 2QFY18 performance was healthy YoY but was below expectation. In the standalone business, revenue growth and EBITDA margin was lower than expected. Muted revenue growth at SMR and EBITDA margin decline at SMP also impacted consolidated performance. Consolidated revenue grew by 33% YoY (partly supported by PKC acquisition), EBITDA margin contracted by 50bps YoY and PAT grew by 21% YoY MSSL's standalone business performance is expected to remain strong on the back of growth in passenger cars and increasing wiring harness content per car. Growth in subsidiaries will be driven by start of new plants in the coming quarters. SMRPBV's total order book increased from Euro12.9bn as of end FY17 to Euro15.2bn as of end 1HFY18. We expect robust growth in earnings for the company over FY17-FY19E. However, we believe that the stock is trading at premium valuations on FY19E earnings. We thereby rate the stock as SELL (earlier ACCUMULATE) with price target of 342 (earlier Rs344)

Shares of MOTHERSON SUMI SYSTEMS LTD. was last trading in BSE at Rs.349.25 as compared to the previous close of Rs. 355.2. The total number of shares traded during the day was 81509 in over 1244 trades.

The stock hit an intraday high of Rs. 358 and intraday low of 348.5. The net turnover during the day was Rs. 28741954.

Source : Equity Bulls

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