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Motilal Oswal Report
Motherson Sumi Wiring India Ltd.'s Q2 FY24 results miss estimate as Ebitda margin came in at 11.8% (versus estimate 12.7%). This shortfall was due to lower gross margins and the gradual rampup of new orders, where operational efficiencies are still being established.
However, we expect Motherson Sumi Wiring's Ebitda margin to improve by 100 basis points over the next two quarters and reach close to FY22 levels, led by cost pass-through and ramp up in new facilities.
We cut FY24E/25E earnings per share by 6%/3% to account for the adverse impact of increase in raw material cost and lower efficiencies.
We reiterate our 'Buy' rating on the stock with a target price of Rs 70 (35 times December-25E EPS)
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