Motherson Sumi's future hinges on foreign arms, stock sheds nearly 5%

Q4 show was below expectations on account of muted margins

The Motherson Sumi stock shed nearly 5 per cent on Thursday on muted margins, new order growth and higher valuations. Consolidated margins at 9.7 per cent in the March quarter (Q4) was 130 basis points (bps) lower year-on-year (y-o-y) because of higher start-up costs due to a new plant, as well as the lag effect of passing on higher raw material costs. 

The India business, which is its most profitable, saw a margin decline of 201 bps y-o-y to 18.5 per cent while the SMP (Samvardhana Motherson Peguform) business, too, saw a decline of 30 bps over the year-ago quarter. The