Our 19th company in the Series of Best Stocks to Buy in India for Short term 2022 is Motherson Sumi Systems Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Motherson Sumi Systems Limited is a system solutions provider to automotive and other industries, offering services from design and prototyping to production and delivery of solutions across a range of products.
Now Let’s check the important fundamental figures of this company. This is a large cap company with Market Cap ₹67,074cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 64.54
Sector PE Ratio: -436.35
PE Ratio of this company is high than Sector’s PE. So it’s a Below Average PE than the peers of this company.
PB Ratio : 4.04
Sector PB Ratio : 6.04
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.71%
Sector Dividend Yield : 0.51%
Dividend Yield of this company is high than Sector. Dividend of this is Below Average than the peers of this company.
ROE: 7.72%
ROCE: 3.43%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 58,010.80 | 1,039.20 |
| 2020 | 61,371.30 | 1,170.10 |
| 2019 | 63,856.20 | 1,613.10 |
| 2018 | 56,611.00 | 1,597.00 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 31,164.80 | 30,207.20 | 28,311.60 | 24,130.00 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 31,164.80 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 3,081.30 | 4,077.90 | 1,549.70 | 201.90 |
Debt Level: Motherson Sumi Systems’s net debt to equity ratio (44.7%) is considered high.
Reducing Debt: Motherson Sumi Systems’s debt to equity ratio has reduced from 84.3% to 65.2% over the past 5 years.
Debt Coverage: Motherson Sumi Systems’s debt is well covered by operating cash flow (34.8%).
Interest Coverage: Motherson Sumi Systems’s interest payments on its debt are well covered by EBIT (10.7x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 61.73% | 16.40% | 10.46% | 3.18% | 8.24% |
| Mar 2021 | 61.73% | 16.87% | 9.72% | 3.10% | 8.60% |
| Dec 2020 | 61.73% | 16.64% | 10.11% | 3.03% | 8.49% |
| Sep 2020 | 61.73% | 16.09% | 10.79% | 3.03% | 8.27% |
Above table showing there is no big change in Promotor Holding which is 61.73% in June 2021. FIIs invested in June 2021 with 16.40% and retail investor is 8.24%.
Now We’ll check the return of the company, This company given 35.07% returns in last 1 year from 2020 to 17 Dec 2021.
Investment Checklist for Motherson Sumi Systems Ltd.
- The company is currently profitable
- Has a high level of debt
- Earnings are forecast to grow by an average of 41.5% per year for the next 3 years
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins improved or Motherson Sumi Systems became profitable
- They have sufficient analyst coverage
- No concerning events detected
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹640B)
- Market cap is meaningful (₹671B)
- Motherson Sumi Systems does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 190 to 210
Target: 275 (30% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 19th company in the Series of Best stocks to buy in India for short term 2021. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss