Motherson Sumi Systems Result Updated

8/3/2019 Motherson Sumi Systems Result Updated

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Please refer to important disclosures at the end of this report 1

Consolidated (` cr) 2QFY12 2QFY11 % chg (yoy) Angel est. % diffNet sales 2,339 1,958 19.5 2,235 4.6EBITDA 204 192 6.1 187 8.7

OPM (%) 8.7 9.8 (110)bp 8.4 32bp

Reported PAT 24 86 (71.8) 70 (65.5)Source: Company, Angel Research

For 2QFY2012, Motherson Sumi Systems (MSS) consolidated net profit was

significantly below our as well consensus estimates, despite better-than-expected

top-line and operating performance. Adjusted EBITDA margin at Samvardhana

Motherson Reflectec (SMR) witnessed a 289bp yoy contraction due to lower

utilization levels at the new plants in Hungary and Brazil. Further, MTM loss of

`74cr primarily on foreign currency loans and higher interest expense severely

impacted the companys profitability. We have revised our FY2012 earnings

estimates downwards to factor in EBITDA margin pressures due to lower utilization

levels at the new plants. However, we believe operating leverage benefits due to

pick-up in order execution will enable MSS to restore its margin in FY2013.We maintain our Accumulate view on the stock.Lower utilization at new plants and notional forex loss affect overall performance:For 2QFY2012, MSS posted strong 19.5% yoy (1.7% qoq) growth in top-line to

`2,339cr, led by a 13.4% (2.5% qoq) and 23.6% yoy (flat qoq) jump in domestic

and overseas sales, respectively. Overseas performance was boosted by strongsales momentum at SMR, which grew by 21.6% yoy (down 2.2% qoq) in INR

terms. Adjusted EBITDA margin fell by 110bp yoy to 8.7%, largely due to a sharp

drop in operating margin at SMR. EBITDA margin at SMR fell by 289bp yoy to

3.3% due to unutilized capacities at the new plants in Hungary and Brazil. Net

profit fell sharply by 71.8% yoy (62.8% qoq) to `24cr, led by notional loss of

`61.4cr on foreign currency loans and a significant increase in interest cost.

Outlook and valuation: We believe execution of orders at SMR will help MSSdeliver volume and revenue growth going ahead. Further, ramp-up in new

capacities will aid margin expansion in FY2013. We expect MSS to deliver a

~15% and ~10% CAGR in its top line and bottom line, respectively, over

FY2011-13E. At `177, MSS is trading at 14.7x its FY2013E earnings. We

maintain our Accumulate rating on the stock with a revised target price of `193.

Key financials (Consolidated)Y/E March (` cr) FY2010 FY2011 FY2012E FY2013ENet sales 6,924 8,371 9,800 11,119% chg 162.3 20.9 17.1 13.5

Net profit 248 384 345 467% chg 41.4 55.0 (10.0) 35.2

EBITDA margin (%) 7.9 10.6 8.5 9.2

Adj. EPS (`) 6.4 9.9 8.9 12.0P/E (x) 26.8 17.9 19.9 14.7

P/BV (x) 5.7 4.3 3.9 3.3

RoE (%) 25.4 27.7 20.6 24.3

RoCE (%) 14.1 24.3 16.8 19.7

EV/Sales (x) 1.1 0.9 0.8 0.7

EV/EBITDA (x) 14.1 8.7 9.3 7.7

Source: Company, Angel Research

ACCUMULATECMP `177

Target Price `193

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code MSS@IN

Shareholding Pattern (%)

Promoters 65.2

MF / Banks / Indian Fls 17.1

FII / NRIs / OCBs 11.0

Indian Public / Others 6.7

Abs. (%) 3m 1yr 3yr

Sensex 3.4 (15.7) 76.6

MSS (18.7) (4.7) 190.2

Beta 0.4

Auto Ancillary

Market Cap (`cr) 6,861

52 Week High / Low 256/162

Avg. Daily Volume 58,696

Face Value (`) 1

BSE Sensex 17,594

Nifty 5,289

Reuters Code MOSS.BO

Yaresh Kothari022-3935 7800 Ext: [email protected]

Motherson Sumi SystemsPerformance Highlights

2QFY2012 Result Update | Auto Ancillary

November 8, 2011


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Motherson Sumi Systems | 2QFY2012 Result Update

November 8, 2011 2

Exhibit 1: Quarterly performance (Consolidated)

Y/E March (` cr) 2QFY12 2QFY11 % chg 1HFY12 1HFY11 % chgNet sales (include Other Op. Inc.) 2,339 1,958 19.5 4,639 3,863 20.1Consumption of RM 1,454 1,194 21.8 2,909 2,356 23.5(% of Sales) 62.2 61.0 62.7 61.0

Staff costs 368 300 22.3 723 596 21.4

(% of Sales) 15.7 15.3 15.6 15.4

Other expenses 314 272 15.6 616 529 16.3

(% of Sales) 13.4 13.9 13.3 13.7

Total Expenditure 2,135 1,766 20.9 4,248 3,481 22.0Operating Profit 204 192 6.1 391 382 2.4OPM (%) 8.7 9.8 8.4 9.9

Interest 23 15 53.6 45 27 67.0

Depreciation 70 61 14.9 132 119 10.9

Other income 3 3 11.9 7 6 9.8

Foreign exchange differences 74 (16) (552.1) 63 (13) (600.2)

Profit before tax 39 135 (71.0) 158 255 (38.1)(% of Sales) 1.7 6.9 3.4 6.6

Provision for taxation 37 47 (22.1) 88 95 (7.0)

(% of PBT) 93.8 34.9 55.8 37.2

PAT before minority interest 2 88 (97.3) 70 160 (56.4)Minority interest (22) 2 (20) 15

Share of profit/(loss) of associates - - - -

Net profit 24 86 (71.8) 90 146 (38.5)PATM 0.1 4.5 1.5 4.1

Equity capital (cr) 38.8 38.8 38.8 38.8

EPS (`) 0.6 2.2 (71.8) 2.3 3.8 (38.5)Source: Company, Angel Research

Better-than-expected net sales growth of 19.5% yoy: For 2QFY2012, MSSregistered strong 19.5% yoy (1.7% qoq) growth in its top line to `2,339cr, driven

by a 13.4% (2.5% qoq) and 23.6% yoy (flat qoq) jump in domestic and overseas

sales, respectively. Domestic revenue stood at`862cr and overseas revenue came

in at `1,428cr. Overseas performance was boosted by 21.6% yoy (down 2.2%

qoq) revenue growth at SMR in INR terms. Despite a demand slowdown in thedomestic passenger vehicle market and labor unrest at Maruti Suzuki one of the

companys major clients, MSS posted strong top-line growth.


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November 8, 2011 3

Exhibit 2: Domestic revenue grows by 13.4% yoy


Exhibit 3: Overseas revenue jumps by 23.6% yoy


EBITDA margin declines by 110bp yoy to 8.7%: For 2QFY2012, MSS registered a110bp yoy decline in its EBITDA margin to 8.7%, marginally ahead of our

expectation of 8.4%. Margin contraction can be attributed to raw-material cost

pressures, which led to a 118bp yoy increase and amounted to 62.2% of net sales.

Standalone operating margin remained firm during the quarter, while margin at

SMR declined sharply by 289bp yoy and 154bp qoq due to start-up costs and

lower utilization levels at the new plants in Hungary and Brazil (utilization levels of

around 5%).

Exhibit 4: EBITDA margin at 8.7%


Exhibit 5: Net profit impacted by forex fluctuations


Net profit nosedives by 71.8% yoy: Net profit for 2QFY2012 stood at `24cr,registering a substantial decline of 71.8% yoy (62.8% qoq). The bottom line

nosedived sharply due to volatility in INR/USD and Euro/USD, as a result of which

notional loss of`61.4cr on foreign loans was booked during the quarter. Further,

a significant increase in interest cost negatively affected the companys profitability.

25.5

58.2

67.1

53.0

59.7

61.9

60.5

33.6

13.4

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3QFY10

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1QFY11

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3QFY11

4QFY11

1QFY12

2QFY12

(%)(` cr) Within India yoy change (RHS)

360.5

496.8

187.4

23.8 4.0 (2.3) 1.016.4

23.6

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(%)(` cr) Outside India yoy change (RHS)

7.7 9.312.3

10.0 9.811.5 11.0 8.1 8.7

61.8 62.4 61.9 62.5 62.3 63.5 63.2 64.1 63.5

16.2 16.5 15.7 15.9 15.7 15.3 14.8 15.6 16.0

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(%) EBITDA margin Raw material cost/sales Staff cost

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(31)

(52)

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(18) (11)

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(`cr) Foreign exchange loss/(gain) Net profit


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November 8, 2011 4

Exhibit 6: Quarterly performance (Standalone)

Y/E March (` cr) 2QFY12 2QFY11 % chg 1HFY12 1HFY11 % chgNet Sales (include Other Op. Inc.) 785 669 17.4 1,536 1,228 25.1Consumption of RM 476 408 16.5 953 743 28.2

(% of Sales) 60.6 61.1 62.0 60.5

Staff Costs 78 63 22.9 154 120 28.1

(% of Sales) 9.9 9.5 10.0 9.8

Other Expenses 111 100 11.1 214 187 14.0

(% of Sales) 14.1 14.9 13.9 15.3

Total Expenditure 664 571 16.3 1,320 1,051 25.6Operating Profit 121 97 24.1 216 178 21.7OPM 15.4 14.6 14.1 14.5

Interest 15 8 86.6 27 12 126.0

Depreciation 24 20 20.3 47 39 21.3Other Income 10 10 (1.2) 34 12 183.3

Foreign exchange differences 47 (11) 42 (9)

PBT (excl. Extr. Items) 45 91 (50.7) 135 148 (9.0)Extr. Income/(Expense) - - - - - -

PBT (incl. Extr. Items) 45 91 (50.7) 135 148 (9.0)(% of Sales) 5.7 13.6 8.8 12.0

Provision for Taxation 13 25 (47.2) 37 53 (28.9)

(% of PBT) 29.5 27.5 27.8 35.6

Reported PAT 32 66 (52.1) 97 95 2.0PATM 4.0 9.9 6.3 7.7

Equity capital (cr) 39 39 39 39

EPS (`) 0.8 1.7 (52.1) 2.5 2.5 2.0Source: Company, Angel Research

Foreign exchange translation losses overshadow strong standalone operatingperformance: MSS posted strong top-line growth of 17.4% yoy (4.4% qoq) to`785cr on the back of 14.2% and 59.3% yoy growth in domestic and overseas

revenue, respectively. Slowdown in the domestic passenger vehicle market and

labor unrest at Maruti Suzuki restricted the growth in domestic revenue to a certain

extent.

On the operating front, EBITDA margin improved by 82bp yoy to 15.4%, largely

due to a decline in raw-material and other operating expenses. Sequentially,

however, EBITDA margin expanded sharply by 270bp on account of savings on

the raw-material front. As a result, operating profit jumped by 24.1% yoy (26.4%

qoq) to`121cr. Net profit, on the other hand, significantly declined by 52.1% yoy

(51.8% qoq) to `32cr, as the company had to account for foreign exchange

translation loss on foreign loans amounting to`41.9cr. Further, higher interest cost

(up 86.6% yoy) and depreciation expense (up 20.3% yoy) negatively affected the

companys bottom line during the quarter.


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November 8, 2011 5

Exhibit 7: Domestic revenue increases by 14.2% yoy


Exhibit 8: Overseas revenue up by 59.3% yoy


Exhibit 9: EBITDA margin trend

Source: Company, Bloomberg, Angel Research

Exhibit 10: Profitability impacted by forex fluctuations


Exhibit 11: Segmental performance Standalone

Y/E Mar (` cr) 2QFY12 2QFY11 % chg 1HFY12 1HFY11 % chgTotal net sales 803 686 17.0 1,591 1,254 26.9 Auto 715 61416.5 1,410 1,126 25.2

Non-Auto 77 61 26.0 147 115 27.3

Other segments 11 11 35 13

Total EBIT 47 87 (46.6) 124 146 (15.0) Auto 37 79(53.4) 110 133 (17.5)

Non Auto 10 8 20.3 14 13 11.5

EBIT margin (%) 5.8 12.7 7.8 11.7 Auto 5.2 12.9 7.8 11.8

Non-auto 12.5 13.1 9.8 11.2


23.9

63.5

77.8

63.3

76.076.8

58.5

36.1

14.2

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2QFY12

(%)(` cr) Within India yoy change (RHS)

(22.1)

(7.6)

15.2 16.4

17.7

37.9 36.9 41.2

59.3

(30)

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(%)(` cr) Outside India yoy change (RHS)

17.5 17.6 15.8 14.4 14.6 16.618.2

12.7 15.4

58.6 60.7 59.461.8 62.5 62.1 62.2 64.4 61.4

10.2 9.8 8.4 10.4 9.7 9.0 8.3 10.2 10.10

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(%) EBITDA margins Raw material cost/sales Staff cost

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(24)

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3

(11)(2)

(10) (6)

47

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6069

29

6678

115

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(`cr) Foreign exchange loss/(gain) Net profit


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November 8, 2011 6

SMR reports net loss: For 2QFY2012, SMR reported a strong 13.4% yoy increase inits net sales to 195mn; however, due to favorable currency movement, revenue in

INR terms grew by 21.6% yoy. Adjusted EBITDA margin declined sharply by 289bp

yoy and 154bp qoq to 3.3%, led by start-up costs and lower utilization levels(~5%) at the new facilities in Hungary and Brazil. The new plants in Hungary and

Brazil have commenced production on a pilot basis and are expected to ramp up

to a significant scale by 1QFY2013. SMR reported net loss of `18cr, led by a

decline in operating performance and MTM loss of`19cr during the quarter.

Exhibit 12: SMR performance

(` cr) 2QFY12 2QFY11 % yoy chg 1QFY12 % qoq chgNet sales 1,265 1,040 21.6 1,293 (2.2)EBITDA 42 65 (35.0) 66 (33.2)

EBITDA margin (%) 3.3 6.2 5.1Depreciation 33 31 4.9 30 7.2

PBT (18) 31 - 29 -

Minority share (21) 7 - 3 -

PAT (18) 7 - 3 -Source: Company, Angel Research

Conference call Key highlights

Despite the demand slowdown in the passenger vehicle industry, management

has not witnessed a decline in its order book position. The order book

scenario remains strong at SMR and standalone level.

Capital expenditure target for FY2012 stands at`700cr-750cr.

MSS has outstanding foreign currency loans worth `745, ~3% of which are

due for repayment in the current financialyear.


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November 8, 2011 7

Investment arguments

Maintaining its leadership position: MSS is a leader in the wire harnessingsegment, controlling over 65% of the domestic passenger vehicle market and

around 48% market share in the domestic rear view mirror market. The

company is now focusing on the supply of high-level assemblies and modules

(MSS is a key supplier for the recently launched Ford Figo), where margins are

comparatively high. MSS is also increasing its content per car in a bid to

diversify its product portfolio. The company is laying emphasis on its global

product plan (GPP), where it is looking at setting up joint ventures with leading

tier-I suppliers to upgrade its technology base and bolster its clientele.

Pick-up in order execution at SMR to boost performance: SMR has shown asubstantial margin expansion since taken over by MSS and has bagged orders

of about 800mn to be supplied over the life of the new models, which would

be launched in the near future. MSS is gradually progressing towards

achieving its target of ~8% EBITDA margin at the SMR front.

Exhibit 13: Five-year milestone set in FY2000


Exhibit 14: Five-year milestone set in FY2005


Exhibit 15: MSSs targets for FY2015


Not more than 25% from one customer Largest customer constituted27% of total turnoverTo achieve 30% of sales from outsideIndia

Achieved 29% from exportsTo achieve dividend payout of 40% Achieved payout ratio 43%

To cross`10bn in revenue by FY2005 Achieved `10.2bnTo attain RoCE of 40% Achieved RoCE of 39%

L a rgest customer constituted15 % of total turnover

To cross US $1bn in revenue by FY2010 To achieve US $1.5bnTo achieve 60% of sales f rom outsideIndia

Ac hieved over 65% ofsa les from outside IndiaNot more than 20% from one customer

To strive to maintain business RoCE of40%

Ro C E 37% standalone &22 % consolidated basisTo achieve dividend payout of 40% onconsolidated profit

Achieved payout ratio of23% for FY2010

Requ ires turnaround in theoverseas marketWill offer potential returns toinvestors

Th rough JVs and acquisitionsacross geographies

Can be achieved as it has ast rong execution track recordCould be a potential upside riskto o ur EBITDA margins

To achieve 70% of sales fromoutside India

To achieve dividend payout of40% of consolidated profit

To increase reach from 21countries to 26 countries

To cross US $5bn in revenueon a consolidated basis

To attain RoCE of 40% on aconsolidated basis

Management Our view


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November 8, 2011 8

Outlook and valuation

We believe execution of orders at SMR from OEs such as BMW, Volkswagon, and

Daimler will help MSS deliver volume and revenue growth going ahead. Further,

ramp-up in new capacities will aid margin expansion in FY2013. We have revisedour FY2012 earnings estimates downwards to factor in EBITDA margin pressures

due to lower utilization levels at the new plants. However, we believe operating

leverage benefits due to pick-up in order execution will enable MSS to restore its

margin in FY2013.

Exhibit 16: Change in estimates

Y/E March (` cr) Earlier Estimates Revised Estimates % chgFY2012E FY2013E FY2012E FY2013E FY2012E FY2013E

Net sales 9,572 10,961 9,800 11,119 2.4 1.4OPM (%) 9.6 9.8 8.5 9.2 (106)bp (55)bp

EPS 9.5 12.0 8.9 12.0 (6.3) 0.4Source: Company, Angel Research

We are not factoring in the acquisition of Peguform GmbH in our estimates

currently, as we wait for the complete consolidation to take place.

We expect MSS to deliver a ~15% and ~10% CAGR in its top line and

bottom line, respectively, over FY2011-13E. At `177, MSS is trading at 14.7x its

FY2013E earnings. We maintain our Accumulate rating on the stock with a revisedtarget price of `193.

Exhibit 17: Key assumptions

Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013EMirror - 364 4,153 4,539 5,265 5,897

Wiring Harness Group 1,335 1,568 1,810 2,488 2,986 3,46

Polymer Group 437 449 561 889 1,049 1,207

Rubber, Metals and other parts 256 215 178 260 299 334

Total net sales 2,028 2,596 6,702 8,176 9,598 10,901% yoy growth

Mirror - - 1,040 9.3 16.0

Wiring Harness Group 36.2 17.4 15.5 37.5 20.0 16.0

Polymer Group 11.3 2.7 25.0 58.5 18.0 15.0

Rubber, Metals and other parts 65.5 (15.9) (17.2) 45.7 15.0 12.0

Total sales 32.8 28.0 158.2 22.0 17.4 13.6% of Total sales

Mirror - 14.0 62.0 55.5 54.9

Wiring Harness Group 65.8 60.4 27.0 30.4 31.1 31.8

Polymer Group 21.5 17.3 8.4 10.9 10.9 11.1

Rubber, Metals and other parts 12.6 8.3 2.7 3.2 3.1 3.1

Total sales 100.0 100.0 100.0 100.0 100.0 100.0Source: Company, Angel Research


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November 8, 2011 9

Exhibit 18: Angel vs. consensus forecastAngel estimates Consensus Variation (%)FY12E FY13E FY12E FY13E FY12E FY13E

Total operating income (` cr) 9,800 11,119 10,660 12,895 (8.1) (13.8)EPS (`) 8.9 12.0 11.3 14.8 (21.2) (18.6)

Source: Bloomberg, Angel Research

Exhibit 19: One-year forward P/E band


Exhibit 20: One-year forward P/E chart


Exhibit 21: One-year forward EV/EBITDA band


Exhibit 22: One-year forward EV/EBITDA chart


Exhibit 23: Auto Ancillary Recommendation summary

Company Reco. CMP(`) Tgt. price(`) Upside(%)P/E (x) EV/EBITDA (x) RoE (%) FY11-13E EPS

FY12E FY13E FY12E FY13E FY12E FY13E CAGR (%) Amara Raja Accumulate 218 24211.5 11.2 9.9 6.4 5.3 22.9 21.1 12.9

Automotive Axle^ Buy 376 450 19.5 9.3 8.4 5.4 4.8 27.6 26.2 24.2

Bharat Forge* Neutral 292 - - 17.0 14.5 8.6 7.0 18.3 18.1 26.9

Bosch India# Accumulate 7,205 7,763 7.7 20.5 18.6 12.7 11.1 21.2 19.4 19.2

Exide Industries Neutral 124 - - 22.3 16.1 13.7 9.6 16.3 20.1 1.7

FAG Bearings# Accumulate 1,300 1,396 7.4 12.5 11.4 6.9 5.8 26.4 23.1 25.1

Motherson Sumi* Accumulate 177 193 8.9 19.9 14.7 9.3 7.7 20.6 24.3 10.3Subros Neutral 27 - - 8.2 6.6 4.7 4.0 8.3 10.0 (7.5)

Source: Company, Angel Research; Note: * Consolidated results; # December year end; ^ September year end

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November 8, 2011 10

Profit and loss statement (Consolidated)

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13EGross sales 2,272 2,783 6,854 8,467 9,845 11,181Less: Excise duty 244 188 151 291 246 280

Net Sales 2,028 2,596 6,702 8,176 9,598 10,901Other Operating Income 24 44 222 195 201 217

Total operating income 2,052 2,640 6,924 8,371 9,800 11,119% chg 33.1 28.7 162.3 20.9 17.1 13.5

Total Expenditure 1,755 2,356 6,375 7,483 8,965 10,094Net Raw Materials 1,124 1,549 4,166 5,145 6,143 6,922

Other Mfg costs 142 141 319 386 461 458

Personnel 247 344 1,200 1,259 1,488 1,711

Other 242 322 690 693 873 1,003

EBITDA 297 283 549 888 835 1,024% chg 26.4 (4.6) 93.6 61.9 (6.0) 22.7

(% of Net Sales) 14.5 10.7 7.9 10.6 8.5 9.2

Depreciation & Amortisation 85 109 260 246 282 304

EBIT 212 174 289 642 552 721% chg 24.7 (17.9) 65.5 122.4 (13.9) 30.4

(% of Net Sales) 10.5 6.7 4.3 7.9 5.8 6.6

Interest & other Charges 29 38 63 58 91 91

Other Income 43 120 118 47 56 62

(% of PBT) 20.5 47.0 33.8 7.5 10.9 9.0

Recurring PBT 226 256 343 631 518 692% chg 39.4 13.1 34.0 84.1 (17.9) 33.5

Extraordinary Items 19 1 (5) 7 0 0

PBT 207 255 348 624 518 692Tax 51 35 109 188 155 208

(% of PBT) 24.7 13.6 31.4 30.1 30.0 30.0

PAT (reported) 175 221 234 443 363 484Less: Minority interest (MI) (3) 45 (9) 52 17 17

PAT after MI (reported) 178 176 243 391 345 467

Adj. PAT 159 175 248 384 345 467% chg 22.9 10.3 41.4 55.0 (10.0) 35.2(% of Net Sales) 7.8 6.7 3.7 4.7 3.6 4.3

Basic EPS (`) 4.5 4.9 6.6 9.9 8.9 12.0Fully Diluted EPS ( ) 4.1 4.5 6.4 9.9 8.9 12.0% chg 22.9 10.3 41.4 55.0 (10.0) 35.2


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November 8, 2011 11

Balance sheet (Consolidated)

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13ESOURCES OF FUNDSEquity Share Capital 36 36 37 39 39 39Reserves & Surplus 500 748 1,127 1,570 1,712 2,054

Shareholders Funds 536 783 1,165 1,609 1,750 2,093Minority Interest 23 200 203 228 228 228

Total Loans 489 895 818 1,263 1,513 1,513

Deferred Tax Liability 4 15 4 1 1 1

Total Liabilities 1,052 1,893 2,190 3,101 3,493 3,835APPLICATION OF FUNDSGross Block 949 2,947 3,182 3,821 4,705 5,059

Less: Acc. Depreciation 346 1,599 1,727 2,055 2,338 2,641

Net Block 603 1,349 1,455 1,766 2,367 2,417Capital Work-in-Progress 28 176 181 460 235 253

Goodwill - - - - - -

Investments 5 55 47 45 52 58Current Assets 904 1,884 2,097 2,793 3,032 3,551

Cash 95 277 343 356 417 457

Loans & Advances 190 383 310 443 518 589

Other 618 1,224 1,444 1,993 2,097 2,506

Current liabilities 531 1,597 1,592 1,963 2,194 2,445

Net Current Assets 373 286 505 830 837 1,107Mis. Exp. not written off 42 27 2 - - -

Total Assets 1,052 1,893 2,190 3,101 3,493 3,835


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November 8, 2011 12

Cash flow statement (Consolidated)

Y/E March (`` cr) FY08 FY09 FY10 FY11 FY12E FY13EProfit before tax 207 255 348 624 518 692

Depreciation 85 109 260 246 282 304Change in Working Capital 37 (429) 231 245 (163) 185

Less: Other income 115 (220) 459 547 (603) 289

Direct taxes paid 51 35 109 188 155 208

Cash Flow from Operations 163 120 271 380 1,085 684(Inc.)/Dec. in Fixed Assets (197) (2,146) (239) (918) (659) (371)

(Inc.)/Dec. in Investments (0) (50) 8 2 (7) (5)

(Inc.)/Dec. in loans and advances (55) (192) 74 (113) (79) (64)

Other income 43 120 118 47 56 62

Cash Flow from Investing (210) (2,268) (40) (982) (689) (378)Issue of Equity 12 - 2 1 - -

Inc./(Dec.) in loans 29 406 (77) 446 250 -

Dividend Paid (Incl. Tax) 42 56 57 80 128 113

Others (128) 1,454 (121) (231) (714) (379)

Cash Flow from Financing (45) 1,916 (139) 296 (336) (266)Inc./(Dec.) in Cash (93) (233) 92 (306) 60 40

Opening Cash balances 99 95 277 343 356 417Closing Cash balances 95 277 343 356 417 457


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November 8, 2011 13

Key ratios

Y/E March FY08 FY09 FY10 FY11E FY12E FY13EValuation Ratio (x)P/E (on FDEPS) 39.7 35.9 26.8 17.9 19.9 14.7P/CEPS 24.2 19.1 13.1 10.9 10.9 8.9

P/BV 11.8 8.1 5.7 4.3 3.9 3.3

Dividend yield (%) 0.8 0.8 1.0 1.6 1.4 1.6

EV/Sales 3.4 2.8 1.1 0.9 0.8 0.7

EV/EBITDA 26.0 27.2 14.1 8.7 9.3 7.7

EV / Total Assets 6.9 3.9 3.3 2.5 2.3 2.0

Per Share Data (`)EPS (Basic) 4.5 4.9 6.6 9.9 8.9 12.0

EPS (fully diluted) 4.1 4.5 6.4 9.9 8.9 12.0

Cash EPS 7.3 9.3 13.6 16.3 16.2 19.9

DPS 1.3 1.3 1.8 2.8 2.5 2.8

Book Value 15.0 22.0 31.0 41.3 44.9 53.8

DuPont AnalysisEBIT margin 10.5 6.7 4.3 7.9 5.8 6.6

Tax retention ratio 0.8 0.9 0.7 0.7 0.7 0.7

Asset turnover (x) 2.4 2.1 4.0 3.7 3.4 3.5

RoIC (Post-tax) 18.9 11.9 11.8 20.1 13.6 16.0

Cost of Debt (Post Tax) 4.6 4.8 5.1 3.9 4.6 4.2

Leverage (x) 0.8 0.7 0.5 0.5 0.6 0.5

Operating RoE 30.5 17.1 15.3 27.6 18.7 22.3

Returns (%)RoCE (Pre-tax) 22.2 11.8 14.1 24.3 16.8 19.7

Angel RoIC (Pre-tax) 22.3 10.8 15.6 23.5 18.0 21.4

RoE 34.7 26.6 25.4 27.7 20.6 24.3

Turnover ratios (x) Asset Turnover (Gross Block) 2.4 1.4 2.3 2.4 2.3 2.3

Inventory / Sales (days) 44 63 35 38 40 40

Receivables (days) 51 66 38 38 39 41

Payables (days) 56 113 69 66 68 68

WC cycle (ex-cash) (days) 42 20 5 14 17 18

Solvency ratios (x)Net debt to equity 0.7 0.7 0.4 0.5 0.6 0.5

Net debt to EBITDA 1.3 2.0 0.8 1.0 1.3 1.0

Interest Coverage 7.4 4.5 4.5 11.1 6.1 7.9


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Disclosure of Interest Statement Motherson Sumi Systems

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)

Research Team Tel: 022 - 3935 7800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or

other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or inthe past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in

connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, pleaserefer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited andits affiliates may have investment positions in the stocks recommended in this report.

Motherson Sumi Systems Result Updated

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