Motherson Sumi Q3 Results 2022

Automotive components manufacturer and supplier Motherson Sumi Systems posted its quarterly results for Q3 FY22 on February 11, 2022. The company reported a massive dip of ~80% YoY in its consolidated PAT which came in at Rs 226 crore for the quarter under review from Rs 1,127 crore in the year ago period. On a sequential basis, the company’s PAT was up 143% QoQ from Rs 93 crore in Q2 FY22.

Motherson Sumi’s revenue from operations saw a decline of 5.7% YoY to Rs 16,117 crore from Rs 17,092 crore in the corresponding quarter in the previous financial year. However, the revenue from operations was up by 14.4% QoQ from Rs 14,076 crore in the previous quarter. In a statement, the company said that a QoQ comparison is a better representation of the supply chain volatility and elevated costs faced by the industry.  

The company like other auto ancillary parts’ companies is reeling under elevated raw material and energy costs and the added supply chain challenges for Motherson Sumi contributed to the drag in their net profit.

Motherson Sumi’s stock closed in the red at Rs 172.15 per share after taking a dip of 4.55% after the company posted its quarterly at the end of the intraday trading session on February 11, 2022.

Hits of Motherson Sumi Q3 Results 2022

• PAT up 143% QoQ at Rs 226 crore from Rs 93 crore in Q2 FY22
• Revenue from operations up by 14.4% QoQ to Rs 16,117 crore from Rs 14,076 crore in the previous quarter
• Revenue from sale of products outside India up by 14.5% QoQ to Rs 14,416 crore from Rs 12,584 crore in Q2 FY22

Misses

• PAT down by ~80% YoY in its consolidated PAT which came in at Rs 226 crore for the quarter under review from Rs 1,127 crore in the year-ago period
• Revenue from operations down by 5.7% YoY to Rs 16,117 crore from Rs 17,092 crore in the year-ago period
• Revenue from sale of products within India down 22.8% YoY, 12% QoQ to Rs 1,389 crore
• Revenue from sale of products outside India up by 8.1% YoY to Rs 14,416 crore from Rs 15,693 crore in the year ago period

Segment-wise revenue

• Motherson Sumi Systems Limited (Standalone): Revenue up by 17.3% YoY to Rs 1,321 crore from Rs 1,126 crore in Q3 FY21
• Samvardhana Motherson Reflectec Group Holdings Limited (overseas subsidiary): Revenue down by 14.5% to Rs 2,932 crore from Rs 3,432 crore in Q3 FY21
• Samvardhana Motherson Automotive Systems Group (overseas subsidiary): Revenue down by 9.7% to Rs 8,431 crore from Rs 9.345 crore Q3 FY21
• PKC Group: Revenue up by 3.2% to Rs 2,587 crore from Rs 2,507 crore in Q3 FY21
• Others: Revenue up by 14.7% to Rs 1,248 crore from Rs 1,088 crore in Q3 FY21

What the management says

Commenting on the results, Mr. Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems Ltd. said, “These results are an indication of the resilience of our business and the efforts of our teams globally under challenging market conditions. While the global supply chain shortages have eased partially, challenges from higher costs remain. We are optimistic that the industry situation will gradually improve further in the upcoming months. In this quarter we have received the final NCLT approval which now gives effect to the proposed reorganization and lays the path for future growth through Motherson 2.0. I would like to thank our shareholders for their continued support. I am sure that the Motherson 2.0 journey will be even more exciting for our shareholders. The best is yet to come”

Other things to know about Motherson Sumi

• Successfully raised Rs 1,000 crores via NCD (non-convertible debentures) during Q3, for working capital and repayment of debt which will lower overall interest rate.
• CRISIL upgraded rating of the company one notch higher to AA+/stable.
• The company states that the raw material and energy prices remain elevated, which are a headwind to profitability in the near term.
•  Motherson Sumi is the largest auto parts company in the country with a market capitalization of Rs 81,000 crore (as of February 11, 2022).
• The company has a P/E ratio of 78.40 against the industry average of 426.86 while its P/B ratio is at 4.91 against the industry average of 6.38 (as of February 11, 2022).
• Motherson Sumi’s dividend yield is at 0.58% against the industry average of 0.48% (as of February 11, 2022).

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Research Analyst: Bavadharini KS