Samvardhana Motherson International Ltd -Research Report
Samvardhana Motherson International Ltd (Formerly known Motherson Sumi Systems Limited) is a globally diversified manufacturer and a full system solutions provider to customers in automotive and other industries. The Company is one of the world's largest and fastest growing suppliers for Original Equipment Manufacturers (OEMs) in automotive industry. Its diversified product portfolio includes electrical distribution systems, fully assembled vehicle interior and exterior modules, automotive rear vision systems, molded plastic parts and assemblies, injection molding tools, molded and extruded rubber components, lighting systems, electronics, precision metals and modules, Industrial IT solutions and services and new innovative technologies such as telematics etc. The company has also expanded its presence to support customers in new segments such as health and medical, aerospace and logistics. Out of the 300+ global facilities, 138 are in India, employing more than 90,000 people — including 26 MSWIL plants. It is globally present in 41 countries including USA, Argentina, Brazil, Italy, France, Portugal, India, Russia, UAE, Turkey, South Africa, China, Thailand, Sri Lanka, Australia etc. Business divisions wise its Wiring and Harness business contributed 21% of total revenue followed by Vision systems division with 18% contribution and Modules and Polymer products with 46% in FY23. On emerging business front its Elastomers business contributed 10% of total revenue, Lighting and Electronics with 42%, Precision Metals and Modules with 25%, Technology and Industrial solutions with 11%, 4% with Aerospace, logistics with 2% and Services division with 6% contribution in FY23. Company’s top 20 customers contributed to the 70% of the total revenue generated by the company in FY23 which includes companies such as Mercedes Benz, Audi, Volkswagen, Maruti Suzuki, Stallents, BMW, Porsche, Daimler Group, Hyundai, Renault, Peccar, Ford, General Motors, Scania, and John Dere.
Fundamentals (FY22-23):
|
CMP |
Rs. 92 |
|
52 - week high |
Rs. 103.40 |
|
52 – week low |
Rs. 61.80 |
|
Dividend yield % (consolidated) |
0.71 % |
|
ROE |
6.66 % |
|
BVPS (Rs.) |
35.98 |
|
Sales (Rs.) |
78,700 cr. |
|
Debt to Equity |
0.54 |
|
P/E ratio |
30.36 |
|
EPS (consolidated) |
2.02 |
|
P/B ratio |
1.03 |
|
Market Cap |
62,343 Cr. |
|
Face value |
Rs. 1 |
Financial Results:
Company’s Net Sales was at Rs 22,462.18 crore in June 2023 up 27.52%, Quarterly Net Profit at Rs. 600.87 crore in June 2023 up 325.49% and EBITDA stands at Rs. 1,977.51 crore in June 2023 up 68.35% as compared to June 2022. Company’s EPS has increased to Rs. 0.89 in June 2023 from Rs. 0.31 in June 2022.
Key Points:
- Motherson Group entered an alliance with Prysm Systems, a leading provider of large-format Laser Phosphor Displays (LPD), and Prysm Application Suite, a visual collaboration solution. These offerings are designed to empower individuals and teams, giving them the capability to interact with their data, content, and apps on displays of any scale, including the world’s most expansive single-panel bezel-free 225-inch touch interactive 6K display.
- Company has recently opened its wiring harness facility in UAE which specialises in manufacturing wiring harnesses for commercial vehicles and other special-purpose vehicles and also exports them to its customers in Europe. Including this, Motherson has eight facilities in the region (other facilities are in Dubai and Sharjah), highlighting the UAE’s crucial role in the company’s strategy.
- Motherson Group has recently acquired SAS Autosystemtechnik GmbH (Germany) which has been a leading global provider of assembly and logistics services for the automotive industry. This strategic acquisition further strengthens Motherson's position in the global automotive supply chain and will enhance customer proximity amongst leading European and American OEMs.
- The company also acquired Dr. Schneider Group of Germany with revenues of Euro 472 million to strengthens interior polymer business, with focus on innovation and technology. Dr. Schneider Group is a technology leader in air vents, decorative interior polymer components with illumination and has a strong presence in premium vehicles. It has a strong focus on R&D and product innovation, resulting in over 200 patents with 07 facilities across 05 countries (Germany, Spain, Poland, the USA, and China).
- It has also entered into a strategic partnership with Honda Motor by acquiring an 81% stake in Yachiyo Industry (4W Business), a Honda Motor subsidiary.
- Motherson in collaboration with Marelli inaugurated the first-ever tool room in India, the Motherson Automotive Lighting Tool Room (MALT), which is a ground-breaking facility that marks a significant milestone in automotive lighting technology.
- The company recently acquired Cirma Enterprise, a France-based company engaged in manufacturing Electrical Wiring and Interconnect Systems (EWIS) for aerospace, shipbuilding, allied Industries etc. This acquisition will mark Motherson’s diversification into Electrical Wiring and Interconnect Systems (EWIS) for aerospace, shipbuilding, and other allied Industries.
- Motherson has bagged an order from Boeing to manufacture and supply aftermarket molded polymer parts for commercial airplane interiors. It will be produced in a Motherson plant situated in Noida, India.
- Samvardhana Motherson Automotive Systems Group BV (SMRP BV), a Motherson company signed an MOU with Vale to create the automotive vehicle interior of the future through the integration of lighting systems with advanced surface finishes. Valeo’s innovative lighting systems will be integrated with Motherson’s new cabin interior modules and surfaces.
- Samvardhana Motherson Automotive Systems Group BV (SMRPBV) has also signed an MOU with Marelli Automotive Lighting to explore new technological partnership focused on smart illuminated exterior body parts such as front grills and bumpers, along with other car parts that can be illuminated. These components have already become a growing trend in the future of mobility with the increased adoption of Advanced Driver-Assistance Systems (ADAS) and Autonomous Driving (AD).
- Motherson has also collaborated with a startup named Gestoos to develop an Artificial Intelligence (AI)-based platform to detect human presence in the vehicle.
- Motherson Medical and Aster DM Healthcare have joined hands to provide affordable and reliable diagnostic devices & solutions in the global market.
- Company has also acquired Ichikoh Industries (Japan), a leading manufacturer of rearview mirrors to increase its access to customers in Japan and China and create numerous growth opportunities.
In last 1 Year the stock gave a whooping return of 42.30% as compared to the rise of Sensex and Nifty in the same period.
Company has a diversified range range of technologies and capabilities which allows it to support a wide spectrum of sectors, with automotive as the main industry served. Company has envisioned USD 36 billion revenues in 2024-25 with 40% ROCE and 75% of revenue from automotive industry and remaining 25% from new divisions. Company has also set the target of being Carbon Net Zero across all its current global operations by 2040. Company has a very vast presence in various geographies through its various divisions and it believes in acquisition strategies which makes easier for the company to enter various businesses and delivering growth in all of them. Company’s foray into emerging segments such as EV, Aerospace, Medical and Healthcare and Logistics has placed the company in a very sweet spot to enjoy streamlined and growing revenue stream in future. Considering the growth prospects of various industries where the company operates along with good financial performance and growth oriented vision of the company investors can invest in this company for long term period.
HET ZAVERI
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