Shares of Motherson Sumi Wiring India soared 20 per cent to hit fresh 52-week high in Wednesday's trade amid heavy volumes, as they turned ex-bonus in the 2:5 ratio.
The stock rose 19.98 per cent to hit a fresh high of Rs 71.15 on BSE. Later, the scrip was trading at Rs 61.50, up 3.71 per cent. A total of 12.67 lakh shares changed hands on the counter against a two-week average of 4.23 lakh shares.
The auto component maker recently reported a 2 per cent rise in net profit at Rs 116.45 crore for the September quarter compared with a profit of Rs 114 crore in the year-ago quarter. Total revenue from operations for the quarter stood at Rs 1,835.21 crore compared with Rs 1,399.95 crore in the year-ago quarter.
Elara Securities in a November note said that strong parent backing of Motherson Sumi and technical collaboration would strengthen the company's foothold in the EV space and new emerging technologies.
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Over the past 12 years, the company posted a 14 per cent revenue CAGR against a 2 per cent volume CAGR for the PV industry, it noted.
"While margin is likely to improve sequentially with the lag effect of lower copper prices, we believe it has been factored into the stock price. Increasing content per vehicle in EV is expected to benefit MSWIL in the initial years, but risks associated with technology and platform changes remain, resulting in reduced wiring harness content and increased competition. Further, MSWIL is now a sole product company and geography company, restricting potential for rerating above 30x P/E," it said.
Nuvama Institutional Equities, meanwhile, likes the company's strong India franchise. "It is also well placed to capitalise on a global volume revival. Post the sharp correction in stock price, we believe valuations are reasonable," it said.
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