Buy Motherson Sumi Systems; Target Of Rs 165: Prabhudas Lilladher

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Prabhudas Lilladher's research report on Motherson Sumi Systems

MSS hosted a virtual investor meet (Link for PPT) outlining key strategies to achieve for their vision 2025 targets. These include 1) Consol revenues at USD36bn 2) 3CX10 (no country/component/customer contribute >10% in topline) 3) 25% revenue from non-auto and 4) 40% of consol profit as dividend. In its sixth five-year plan (2020-2025), MSS is aggressive in targeting ~25% revenue from non-auto verticals such as Aerospace, Health care, IT and Logistics which are likely key enablers of USD9bn revenues (both organic and inorganic). In our view, their target of USD36bn revenue by 2025 (v/s ~USD9bn in FY20) is aggressive and it will be pre-loaded by acquisitions both in auto and non-auto segment. It has hinted on several mid/large scale opportunities available in auto/non-auto space globally. While we remain constructive on MSS ability in automotive segment, growth in unchartered non-auto verticals (backed by wiring harness) is already seen.

Outlook

We maintain BUY with revised TP of Rs165 (vs Rs147) at 20x Mar-23 consol EPS (v/s Sep-22), with unchanged earnings. Inorganic opportunities and growth in non-auto space remain key rating catalyst going forward.
For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.