Q1 results: High utilisation to boost Motherson Sumi margins, stock falls

Rising raw material, start-up costs impacted profitability in the June quarter

The stock of auto components major Motherson Sumi shed 7.3 per cent in the last week on weak June quarter performance. The company’s operating and net profit came in 5-11 per cent below expectations. 

The lower-than-expected operational performance was due to the delay in passing on commodity inflation to customers, low utilisation and start-up costs at its plants. 

On the revenue front — adjusted for change in accounting standards — the same was up 24 per cent and beat analyst estimates.

For the stock to see significant upsides, the key trigger would be an uptick in margins at its two