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Motherson Sumi Reports 30% Increase in Net Profits On Improved Margins and Debt Reduction

Motherson Sumi Reports 30% Increase in Net Profits On Improved Margins and Debt Reduction

Shreesh Biradar1 min read
Quick Facts
What is "Motherson Sumi Reports 30% Increase in Net Profits On Improved Margins and Debt Reduction" about?
What category is this article in?
Stocks
Who wrote this article?
Shreesh Biradar, Capitalmind's research team.
When was this article published?
Published 10 November 2016.
How long does this article take to read?
1 min read
What topics does this article cover?
MOTHERSUMI

The automotive mirrors and module giant has been expanding its global footprint and its customer base. Motherson Sumi supplies door panels, instrument panels and bumpers along with mirrors to the automotive companies. Motherson Sumi has OEMs with 14 companies out of top 15 global automotive companies.

Motherson Sumi has started commercial production of bumpers, spoilers, panels and wheel cover from its Mexico plant. The commercial door panel manufacturing plant in China has also started operating in the current year. Two plants are under construction at Hungary and Alabama.

Motherson Sumi reported a revenue growth of 14.31% along with a profit growth of 30.37% YoY for Q2FY17. Operating Margin improved from 6.87% in Q2FY16 to 7.18% for Q2 current year.

** 82.5%** of the revenue came from international operations, the rest from domestic sources.

71% of the revenue is generated from European countries, of which 38% is contributed by Germany alone. Revenue share from Asia pacific and America has seen an increasing trend for the current quarter. The major automotive companies which generate revenue for Motherson Sumi are Audi (26%), Daimler (13%) and Volkswagen (10%).

The company added new orders to the tune 12,000 Crs for the current half year ending September 30 2016. The current order book stands at Rs 89,000 Crs

Finance costs of the company has come down by** 8.27%** YoY on account of debt reduction by almost 50% from the start of the current financial year (if cash in bank is considered). Even with that Motherson Sumi has a higher leverage, its current debt to equity ratio is at 86.7%. It currently has 7,328 Crs as outstanding long term borrowings.

In Q2 current year Motherson Sumi has raised 2,517 Crs by issuing 8.05 Cr new shares for Sumitomo Wiring Systems Japan and QIP.

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