Motherson Sumi shares gain post Q2 earnings; brokerages remain upbeat

Motherson Sumi Systems share price gained a percent intraday on November 11, a day after the company declared its September quarter results.

Japanese brokerage firm Nomura has retained a buy call on the stock with target of Rs 162 per share. It is of the view that Q2 earnings were ahead of estimates with recovery in demand likely to drive growth, according to a CNBC-TV18 report.

The company may witness strong earnings growth over FY22-23, it said.

Macquarie has maintained an outperform call on the stock with target of Rs 124 per share. It expects the auto ancillary company to benefit from global auto recovery adding that turn-around of greefield plants is a bottom-up catalyst.

The research firm expects capital discipline to continue in company's pursuit of new targets.

CLSA has also retained outperform call on the stock with target of Rs 140 per share. It is of the view that EBITDA breakeven in greenfield plants drove Q2 earnings beat adding that Q2 results were ahead of expectations.

The research firm has increased FY21-23 EPS estimates by 7-21 percent.

The auto component manufacturer on November 10 reported a 2.7 percent rise in consolidated net profit at Rs 387.93 crore for the second quarter ended September 30. The company had posted a net profit of Rs 377.73 crore in the July-September period of previous fiscal.

Total revenue from operations, however, declined to Rs 14,957.21 crore during the quarter under review as against Rs 15,259.74 crore in the year-ago period, Motherson Sumi Systems Ltd (MSSL) said in a statement.

The company said that around 80 percent of its facilities are running at over 75 percent capacity, indicating that things have come back to near normal.

"Global automotive industry is on a path to recovery in the post COVID world. We are seeing a surge in demand across the globe. Our teams are geared up to fulfil the demands of our customers," said the company Chairman Vivek Chaand Sehgal.