Motherson Sumi share price today is Rs 250, down Rs 19 or 7%. Motherson Sumi share price made a high of Rs 272.85 yesterday. The market cap of Motherson Sumi is nearly Rs 80000 cr today. The 52 week low on the stock is Rs 86.25 and the stock has multiplied 3 times from the lows. 
 
Kotak Institutional Equities explains that Motherson Sumi reported 4QFY21 consolidated EBITDA Rs17.2 bn (+39% yoy), 8% below their estimates led by weaker margin performance in SMRPBV and PKC businesses. Kotak believes That Motherson Sumi is well-placed to capitalize on the recovery in auto demand from FY2022E onwards. It is well-poised to benefit from the increase in electronics content per vehicle in passenger vehicles and the shift towards electric vehicles globally, given strong order wins. Kotak Maintain ADD with revised FV of Rs 260 (from Rs 200).
 

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Kotak have increased our FY2022-23E consolidated EPS estimates by 2-7% led by:
 
(1)   higher revenues and EBITDA margin assumptions for the standalone business
(2)    lower tax rate assumptions for the SMRPBV business
 
Kotak believes auto demand will likely recover in FY2022E led by gradual recovery in economic activity globally, which augurs well for the company. Also, Kotak expects the content per vehicle for Motherson Sumi to increase as customers globally shift towards EVs over the medium term and 25% of the SMRPBV’s order book (EUR 15.6 bn) constitutes dedicated EV models as of March 2021, which is encouraging. 
 
Kotak expects the company to generate >Rs160 bn of Free cash flow (assuming no major capex) over the next three years led by:
 
(1)   strong operating performance
(2)    reduction in capex spends
 
Also, Motherson Sumi has reduced its consolidated net debt to Rs 48.2 bn as of March 2021 from Rs 69.2 bn as of March 2020, which is encouraging. ADD stays with a revised SoTP-based FV of Rs 260 (from Rs 200) due to:
 
(1)   higher terminal growth assumptions for the SMRPBV business given strong order winds in the EV segment
(2)    2-7% earnings upgrade