Near-term pressures for Motherson Sumi due to supply disruptions

Margin trajectory at international subsidiaries remains a key trigger for the stock

Motherson Sumi reported a muted performance in the June (Q1FY22) quarter because of multiple issues across its major markets. While global operations were impacted by production stoppages due to erratic supplies, domestic business underperformed on account of the second wave of Covid infections. 

Though the consolidated revenue fell 5 per cent on a sequential basis, missing expectations by 9-10 per cent, it was the sharp miss at the operating profit level that disappointed the most. The company reported a 29 per cent sequential decline in Ebitda at Rs 1,220 crore —

30 per cent lower than estimates. Supply disruptions because of chip