Monday 16 May 2016

Motherson Sumi likely to be soft in Q4 performance

Motherson Sumi Systems, one of the leading automobile component players in the country, will announce its financial results for the fourth quarter ended March 31, 2016 on May 17.

Motherson Sumi Systems, one of the leading automobile component players in the country, will announce its financial results for the fourth quarter ended March 31, 2016 on May 17.

As per IIFL’s forecast, the company is expected to register a net revenue of Rs.10,310 crore, growing at 4.6% qoq and 8.8% on yoy basis.

Operating profit margin of the company is likely to be at 10.0%, a rise of 44 bps yoy and 12 bps qoq.

IIFL estimates the company’s net profit to be at Rs.330 crore, which constitutes a 7.5% rise qoq, however a decline of 2.9% yoy.

Motherson is expected to be slightly soft in this quarter. According to IIFL estimates, autos are to register strong PAT growth (32.4% yoy) with most major players doing well. Auto volumes were robust across segments, except cars. OPM of most companies under coverage will rise on account of benign commodity prices and operating leverage.

Auto component players are expected to see another quarter of decent growth as revenues rise on the back of good OEM demand and margins expand as a result of benefits of operating leverage. Replacement demand in certain segments such as tyres has also started picking up.

Other key Q4 results on May 17 are Glaxosmithkline Consumer Healthcare, Mahindra Holidays & Resorts, Bharat Forge, MPS Ltd, MT Educare, OCL India, Symphony Limited and Voltas Limited.

Our preview coverage universe of 374 companies, representing ~75% of India’s equity market cap is expected to report 4.2% yoy drop in net profit in Q4 FY16. On a qoq basis, profits will rise by 17% on account of low base of preceding two quarters, which had witnessed sequential PAT declines.

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