Grandmother Sumi transfer to distribute bonus shares. The stock gets a Buy recommendation from ICICI Securities.

  • Oct. 1, 2022, 12:53 p.m.

Since demerger, Motherson Sumi Wiring India Ltd's (MSWIL) share price has grown by 31.5% (from around 64 in April 2022), vastly outperforming the Nifty Auto index at the same time. Domestic brokerage and research firm ICICI Securities, in a note, said that it has brought MSWIL into coverage pursuant to the de-merger.

The brokerage house has assigned a Buy rating to Motherson Sumi Wiring shares amid structural levers for long-term secular growth with a target price of 105 apiece.

According to the brokerage, key triggers for future price performance could include pent-up demand in the PV space amid a strong order book across OEMs and increasing consumer preference for advanced technology enabled vehicles, i.e. better wiring harness content, resulting in an 18% sales CAGR over FY22–25E.

"With increasing capacity utilisation levels and associated operating leverage at play, margins are seen improving to 13.5% by FY24E-25E FY22: CFO/FCF generation is healthy." A wiring harness acts as the nervous system of an automobile, primarily used to transport an electronic signal. "Content is pegged at 2-3% of the vehicle price," the note stated.

"Content/vehicle is set to gain from the increasing application of electronics (ADAS, TPMS, connected vehicle, etc.) in automobiles and even electrification." "Content/vehicle in an EV is pegged at 1.5–2x of an ICE vehicle," it added.

Motherson Sumi Wiring India Ltd on Friday announced that its board of directors at the meeting held on September 30, 2022, has recommended the issuance of bonus equity shares of the company in the ratio of 2:5, which means that the company will issue 2 bonus shares for every 5 shares held, which is subject to the shareholders' approval.

Motherson Sumi Wiring informed in an exchange filing today that the board of directors of the company in its meeting held today, i.e., September 30, 2022, has recommended the issue of bonus shares in the ratio of 2 (two) bonus (fully paid up) equity shares against 5 (five) equity shares of Re. 1.00 each held in the company.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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