Buy Motherson Sumi Wiring India Ltd for the Target Rs. 48 by Choice Institutional Equity
Key Conference Call Highlights
* MSUMI crossed INR 100 Bn in annual revenue for the first time, with Q4FY26 showing ~33% YoY growth. The management attributed roughly 5% of that growth to copper price pass-throughs, with the remaining ~28% driven by volume gains
* Gross margins contracted 293 bps sequentially, almost entirely attributed to copper price inflation and the lag (3–6 months) in passing it on to customers
* Polymer/PVC prices are newer and emerging concerns given global supply disruption. Management has guided that it would work transparently with customers to find solutions, indicating eventual pass-through here too
* Combined quarterly revenue from all three greenfields crossed INR 4,400 Mn in Q4FY26. The earlier annualised target of INR 20,000–21,000 Mn appears within reach as the facilities ramp up
* Greenfield losses are shrinking quarter on quarter. Management indicated that, once volumes reach 80% utilisation, greenfield margin should normalise to a level comparable to existing plants
* Capex for FY27 is guided at INR 2,000 Mn
* The capex mix will be: (1) Greenfield expansions tied to confirmed OEM orders, (2) Automation and digitisation and (3) Replacement capex at existing plants
* The company is winning orders across all powertrain types — ICE, EV and hybrid — reflecting a technology-agnostic strategy
* Existing plants are running at ~80% capacity utilisation, which is the internal threshold which prompts expansion planning
* Management expressed confidence that Q1FY27 growth momentum will continue at a pace similar to Q4FY26
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