Motherson Sumi Systems extends losses after brokerage downgrade

Motherson Sumi Systems fell 2.86% to Rs 320.50 at 12:02 IST on BSE after a foreign brokerage reportedly maintained "sell" rating on the stock.

Meanwhile, the BSE Sensex was up 108.37 points, or 0.39%, to 27,883.25.

On BSE, so far 3.57 lakh shares were traded in the counter, compared with average daily volume of 3.09 lakh shares in the past one quarter. The stock hit a high of Rs 326 and a low of Rs 310.20 so far during the day. The stock hit a 52-week high of Rs 358.55 on 2 August 2016. The stock hit a 52-week low of Rs 206.20 on 25 February 2016. The stock had outperformed the market over the past 30 days till 10 August 2016, rising 12.59% compared with 0.12% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 23.32% as against Sensex's 7.70% rise.

The large-cap company has equity capital of Rs 132.29 crore. Face value per share is Re 1.

A foreign brokerage has reportedly maintained "sell" rating on shares of Motherson Sumi Systems with a target price of Rs 255. Valuation looks expensive after recent rally, the brokerage reportedly said. The brokerage has reportedly cut financial year ending March 2017 (FY 2017) and financial year ending March 2018 (FY 2018) earnings per share estimates of the company by 5-8%.

Motherson Sumi Systems' consolidated net profit rose 15.81% to Rs 439.36 crore on 16.12% increase in net sales to Rs 10352.33 crore in Q1 June 2016 over Q1 June 2015. The company said that the revenue was highest ever in a quarter. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 20% to Rs 928 crore in Q1 June 2016 over Q1 June 2015. The company said that the growth was fuelled by strong performance across the major product divisions and geographies.

The result was announced during trading hours yesterday, 10 August 2016. The stock fell 6.42% to Rs 329.95 yesterday, 10 August 2016. The stock has fallen 9.10% in two sessions from Rs 352.60 on Tuesday, 9 August 2016.

Motherson Sumi Systems is one of the world's fastest growing specialised automotive component manufacturing company for original equipment manufacturers (OEMs). It is a joint venture between Samvardhana Motherson Group and Sumitomo Wiring Systems (Japan).

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