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Motherson Sumi Systems Q4FY19 earnings: Here's what to expect

Updated : May 27, 2019 09:37 AM IST

Motherson Sumi Systems' Q4FY19 numbers are expected today.

The stock is down 30 percent in 2019 because of weakness in the domestic business, the tariff issues, Brexit concerns etc. and the company management also acknowledged last quarter that Q4 will be challenging. They said Q4 would be negative but expected a pick-up in FY20. So this quarter’s numbers are expected to be weak.

The main pressure point is a slowdown in the domestic business which is a standalone business. A double digit decline is expected there. Because of production cuts in the passenger vehicle space, in the domestic market, one could see that impact Motherson’s domestic business as well.

The European subsidiaries will be fine, they will likely see a single digit growth this quarter, nothing remarkable and that will lead to just a single digit revenue growth for Motherson Sumi at around 8.5 percent.

The consolidated margins will be under pressure because of the standalone business and the profits are expected to go down by about 16 percent.

Key highlights

- Main pressure point is slowdown in standalone domestic business

- Standalone revenues to see double-digit decline

- Steep cuts in passenger vehicle production volumes to impact sales

- Standalone margins to get hit due to negative operating leverage

- European subsidiaries expected to see single-digit growth

- SMRPBV revenues expected to grow 12 percent (YoY)

- PKC business expected to grow 7 percent in euro terms

- Consolidated revenue to grow 8-9 percent led by European subsidiaries

- Slowdown in domestic business to offset growth in European subsidiaries

- Management expects Q4 results to be challenging

- Management post Q3: Q4 will be negative but expect pick-up in FY20
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