MSUMI - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

Let’s assess Motherson Sumi Wiring India Ltd (MSUMI) — a specialized auto-component maker with strong operational metrics but pricey valuation ⚙️🚗

📘 Core Financials & Performance

Profit Metrics

Quarterly PAT dipped from ₹165 Cr. to ₹143 Cr. — a -13% sequential decline and a -3.88% quarterly variance, reflecting short-term margin pressures.

EPS: ₹0.90 — quite low given the current market price, showing modest profitability.

Return Ratios

ROE: 35.9% and ROCE: 42.5% — stellar metrics, demonstrating excellent capital efficiency and shareholder value generation.

Debt-to-Equity: 0.16 — conservatively leveraged, ensuring financial resilience.

💸 Valuation Snapshot

Indicator Value Implication

P/E Ratio 41.4 Overvalued relative to industry PE of 29.5

P/B Ratio ~14.65 Very rich — demands high future growth

PEG Ratio 4.20 Suggests overvaluation vs growth rates

Intrinsic Value ~₹30–₹34 Currently trading above estimated fair value

🟥 Trading at a premium; valuation may be factoring in strong future recovery or leadership position.

🏭 Business Model & Competitive Edge

A spinoff of Motherson Sumi Systems, focusing on automotive wiring harnesses — critical to EVs and next-gen auto platforms.

Benefits from global auto OEM linkages and strong parentage, but margins fluctuate due to raw material and forex dynamics.

FII stake increased (+0.26%); however, DII stake dropped (-0.33%), signaling mixed institutional sentiment.

📉 Technical Trends & Entry Zone

RSI: 30.5 — approaching oversold territory; signals possible bounce-back.

MACD: -0.71 — bearish momentum at present.

Below both DMA 50 (₹40.2) and DMA 200 (₹39.7) — short-term weakness, possible accumulation soon.

🎯 Suggested Entry Zone

Near ₹33–₹36 for swing traders

Closer to ₹30–₹32 for long-term investors seeking valuation comfort

⏳ Long-Term Holding Outlook

✅ Strength in ROE/ROCE and long-term auto industry tailwinds

⚠️ Valuation discomfort + low EPS may hinder short-term gains

🟢 Suitable for patient investors eyeing EV sector growth, or those banking on turnaround from cyclical lows

Want to size it up against rivals like Suprajit Engineering, Apar Industries, or Sundram Fasteners? I could draft a comparative matrix to highlight sector-wide alpha and key differentiators 🔍📈

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