MSUMI - Motherson Sumi Wiring India Limited Share Price

The management provided an optimistic outlook, emphasizing strong revenue growth (17% YoY) driven by higher volumes and content per vehicle, particularly from hybrid (34% YoY growth) and EV segments (11% YoY). They highlighted gains from clean mobility solutions, including high-voltage cables and battery management systems, alongside increased SUV penetration. EBITDA grew 15% YoY, with resilience despite copper price volatility, mitigated by operational efficiencies. Two new plants are underway: Pune (operational, ramping up by Q2/Q3) and Navagam (delayed to Q1 FY26 due to customer delays). The company remains debt-free, with a focus on ROCE over margins. Capex for FY25 is ~INR200 crore. Management expects industry volumes to double in 3"“5 years, supported by OEM capacity expansions and new model launches. Localization efforts for EV components are progressing, though some parts remain imported. Copper price impacts are managed via pass-through clauses (3"“6 months lag). EV/hybrid contributes ~5% of revenue, with growth potential as clean mobility adoption rises.

Question 1: "Firstly, relating to the results, on EV revenue, there was a growth of 50% Y-o-Y. What would be the share of EV business and revenue?"
Answer Summary: The share of EV and hybrid revenue is approximately 5% of total revenue for Q1.

Question 2: "Other expenses are higher on a Q-o-Q and Y-o-Y basis. What can be the normalized level of other expenses? Are there any one-offs in the result?"
Answer Summary: Higher expenses are due to startup costs for two new plants. No other one-offs; normalization depends on operational ramp-up.

Question 3: "Would it be fair to assume three to six months would be the normal pass-through period [for copper price inflation]?"
Answer Summary: Yes, copper price pass-through typically occurs within a 3"“6 month lag.

Question 4: "On the EV wiring harnesses, how much would be the localization level? And can we expect PLI incentives this year?"
Answer Summary: Localization varies by product; some connectors remain imported. PLI benefits are claimed by customers, not suppliers.

Question 5: "If you look at the RM2 stage, that actually hasn't changed much... Does this number factor in higher [copper] costs?"
Answer Summary: Margins were impacted by product mix, not raw material costs alone. Cooling copper prices may improve margins in subsequent quarters.

Question 6: "How much will be the margin difference between EV and ICE products as EV share rises?"
Answer Summary: Margins depend on project-specific value addition and ROCE focus, not product type.

Question 7: "Can you share timelines for EV localization levels reaching ICE parity?"
Answer Summary: Localization depends on model lifecycle changes and component maturity, with no fixed timeline.

Question 8: "Is there a one-off startup cost for new plants to consider in margins? What is the FY25 capex guidance?"
Answer Summary: Startup costs for new plants are included in current expenses. Capex guidance is ~INR200 crores for FY25.

Question 9: "How do you view industry growth amid reports of a slowdown?"
Answer Summary: Long-term outlook remains positive due to OEM capacity expansion and new model launches; short-term slowdowns are model-specific.

Question 10: "How does JPY volatility affect margins? Is there hedging?"
Answer Summary: JPY-linked costs are passed through with a 3"“6 month lag. The company does not hedge unless customers bear the cost.

Question 11: "How does content differ between ICE and hybrid vehicles?"
Answer Summary: Hybrid vehicles have higher content than ICE due to additional electrical components, but lower than EVs.

Question 12: "Does lower copper pricing improve gross margins?"
Answer Summary: Yes, if copper prices decline and spreads remain stable, gross margin percentages improve. Inventory adjustments may cause quarterly volatility.

Question 13: "What are volume expectations for the newly commissioned plant?"
Answer Summary: The plant is expected to ramp up fully by Q2/Q3 FY25, dependent on customer model performance and market demand.