Brokerages cut Motherson's FY20 profit estimates on weak demand outlook

Investors should await for an improvement in the demand scenario before taking an exposure the stock.

Motherson Sumi stock was down over 9 per cent over last four trading sessions on weak global automotive demand. Weak demand in key markets such as China and the US, regulatory restrictions related to emissions and higher investments is taking a toll on Motherson Sumi. 

Given the near-term demand weakness, plant utilisation is being impacted. Analysts at Edelweiss Securities believe that the commissioning of three new plants has coincided with near-term demand weakness, thereby putting pressure on margins. For example, revenues for SMP was down 2.3 per cent on a comparable basis due to emission norms-related issues. Margins for the