Home / Markets / Stock Markets /  Motherson Sumi Wiring to issue bonus shares. ICICI Securities has Buy rating on the stock

Since demerger, Motherson Sumi Wiring India Ltd's (MSWIL) share price has grown 31.5% (from around 64 in April 2022) vastly outperforming Nifty Auto index at same time. Domestic brokerage and research firm ICICI Securities in a note said that it has brought MSWIL in coverage pursuant to de-merger.

The brokerage house has assigned Buy rating to Motherson Sumi Wiring shares amid structural levers for long term secular growth with a target price of 105 apiece.

Key triggers for future price performance, as per the brokerage could be - with pent up demand in PV space amid strong order book across OEMs & increasing consumer preference for advance technology enabled vehicles i.e. better wiring harness content, it builds 18% sales CAGR over FY22-25E.

“With increasing capacity utilisation levels and associated operating leverage at play, margins are seen improving to 13.5% by FY24E-25E FY22: Net cash positive b/s: 280 crore, healthy CFO/FCF generation. Wiring harness acts as a nervous system of an automobile primarily used to transport an electronic signal. Content is pegged at ~2-3% of vehicle price," the note stated.

“Content/vehicle is set to gain from increasing application of electronics (ADAS, TPMS, connected vehicle, etc.) in automobile & even electrification. Content/vehicle in EV is pegged at ~1.5-2x of ICE vehicle," it added.

Motherson Sumi Wiring India Ltd on Friday announced that its board of directors at the meeting held on September 30, 2022 has recommended the issuance of bonus of equity shares of the company in the ratio of 2:5, which means that the company will issue 2 bonus shares for every 5 shares held, which is subject to the shareholders' approval.

“The board of directors of the company in its meeting held today i.e September 30, 2022 has subject to the approval of the Shareholders of the company has recommended issue of bonus shares in the ratio of 2 (Two) bonus (fully paid up) Equity Shares against 5 (Five) Equity Shares of Re. 1/- each held in the company," Motherson Sumi Wiring informed in an exchange filing today.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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