Earnings Outlook
Motherson Sumi Wiring to report flat margins on year in Q1
This story was originally published at 14:35 IST on 26 July 2025
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By Janwee Prajapati
MUMBAI – Motherson Sumi Wiring India Ltd. is expected to report flat margins in the June quarter as higher revenue will be offset by increased raw material prices, according to brokerages tracking the company. The company's margins are also expected to be affected by the cost incurred on setting up three new plants in Maharashtra, Gujarat, and Haryana.
The company is expected to report a standalone net profit of INR 1.6 billion, up 7.3% on year, according to the average of estimates from five brokerages. The net profit is, however, expected to be down 3.4% on quarter. The highest net profit estimate of INR 1.7 billion is from JM Financial Institutional Securities Pvt. Ltd. while the lowest is INR 1.4 billion from Nuvama Wealth Management Ltd.
The company's profit is expected to rise as the new facility in Maharashtra had started production in the Jan-Mar quarter. However, the cost of setting up the new plants is expected to bring down the company's net profit in the June quarter. "Ramp up of new facilities and operating leverage benefits should be negated by slightly higher RM (raw material) costs, leading to flattish margins YoY," said HDFC Securities.
The company is expected to report standalone net sales of INR 24.5 billion, down 7.2% on year and down 19.6% sequentially. The highest net sales estimate of INR 25.84 billion is from JM Financial whereas the lowest estimate of INR 23.82 billion is from HDFC Securities.
The company's June quarter revenue was hit by the new norms requiring air-conditioning in cabins of commercial vehicles from Jun. 8. The new norms affected the demand for commercial vehicles which account for 10% of the company's total revenue.
Global demand continues to remain weak, while tariff uncertainty continues to impact medium to long term business planning of the auto-ancillary business, brokerages said. This global uncertainty has affected the passenger vehicle segment and two-wheeler segment. As much as 60% of the company's total revenue comes from the passenger vehicle segment and the two-wheeler segment accounts for 13% of total revenue.
The company's Maharashtra plant, which makes powertrains for internal combustion engine vehicles as well as electric vehicles, started production in the trailing quarter. Its unit in Gujarat, which makes powertrains for internal combustion and electric vehicles, will start production in the June and September quarters and the Haryana plant, which makes powertrains only for internal combustion engine vehicles, will go on stream in the September quarter.
The company is expected to post earnings before tax, depreciation, and amortisation of INR 2.6 billion, up 9.2% on year but down 3.7% sequentially. The highest estimated for EBITDA is INR 2.8 billion from JM Financial while the lowest is INR 2.4 billon by Nuvama Wealth Management Ltd. The EBITDA margin is expected to contract on quarter due to costs relating to the new plants, Nuvama said.
The key metrics to monitor when the company announces its results on Monday are the timeline for ramp-up in new plants and customer tie-ups for electric vehicle wiring harnesses.
Friday, the company's shares closed at INR 40.49 on the National Stock Exchange, down 2.2%. The shares are up 6.6% from May 9 when the company had announced its March quarter earnings.
Of the nine research reports on the stock available with Informist, seven have a 'buy' or equivalent rating on Motherson Sumi Wiring with an average target price of INR 71. Two have a ‘sell' recommendation.
Following are the Apr-Jun consolidated earnings estimates for Motherson Sumi Wiring based on reports from five brokerages in descending order by the estimate of net profit:
Brokerages | Net Sales (in million) | Net Profit (in million) | EBIDTA (in million) |
JM Financial Institutional Securities Pvt. Ltd. | 25,848.00 | 1,754.00 | 2,817.00 |
HDFC Securities Ltd. | 2,470.00 | 1,631.00 | - |
Motilal Oswal Financial Services Ltd. | 24,033.00 | 1,597.00 | 2,625.00 |
Nomura Equity Research | 23,815.00 | 1,555.00 | 2,560.00 |
Nuvama Wealth Management Ltd. | 24,327.00 | 1,453.00 | 2,439.00 |
Average | 20,098.60 | 1,598.00 | 2,610.25 |
End
Edited by Ashish Shirke
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