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    Motherson Wiring

    MSUMIGood
    Automobile and Auto Components·5 Nov 2025
    Management Summary

    Motherson Sumi Wiring India Limited (MSWIL) delivered a record revenue performance in Q2 FY26, driven by strong content per vehicle and the ramp-up of new Greenfield facilities. While overall margins are currently weighed down by startup costs and lower utilization at new plants (36%), the core business maintains healthy profitability. Management remains focused on the EV transition and premiumization, though they maintain a cautious stance on the exact timeline for Greenfield plants to reach optimal 70-80% utilization levels.

    Highlights

    8

    • Achieved best-ever quarterly revenue of ₹2,762 crores.

    • EBITDA stood at ₹280 crores, representing a 12% year-on-year growth.

    • EV share of revenue increased to 7%, up from 5% in the previous quarter.

    • New Greenfield plants contributed approximately ₹190 crores to the quarterly revenue.

    • Greenfield capacity utilization reached 36%, showing sequential improvement.

    • Capex guidance for the current fiscal year (FY26) is set at approximately ₹210 crores.

    • Reported EBITDA margin was approximately 10.1%, while adjusted margin (ex-startup costs) was cited at 12.7%.

    • Copper prices increased 5% QoQ and 13% YoY, impacting raw material costs with a quarterly pass-through lag.

    Concerns

    1

    • Greenfield Ramp-up Delays

    What Changed1

    vs Q3 FY26

    Guidance items3 → 2 (-1)

    Key financials

    Single quarter

    04 metrics
    1. 01Revenue₹2,762 Cr
    2. 02EBITDA₹280 Cr+12%YoY
    3. 03EBITDA Margin10.1%
    4. 04EV Revenue Share7%+40%QoQ

    Segment breakdown

    Greenfield Units
    ₹190 Cr Revenue₹46 Cr EBITDA Loss36% Capacity Utilization
    List

    Guidance & targets

    2
    CategoryTargetPriority
    Capex
    Budgeted Capex
    ₹210 crores
    		High
    Capacity
    Greenfield Utilization for Profitability
    70%-80%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Greenfield Ramp-up Delays

    Utilization is currently only at 36%, and profitability depends entirely on customer volume projections which are outside the company's direct control. — Both acknowledged

    high

    Commodity Price Volatility

    Copper prices rose 13% YoY; while pass-through exists, the quarterly lag affects short-term financial performance. — Management acknowledged

    medium

    EV Adoption Uncertainty

    Analysts questioned if higher EV mix in new plants would make reaching historical margins difficult; management insists ROCE will be consistent. — Analyst downplayed

    medium

    Areas of Evasion(2)

    • Specific margin targets for EV components vs ICE.
    • Exact timeline for reaching 70-80% utilization at new plants.

    Q&A highlights

    3

    “If you just remove that impact [recoveries], the losses were around 70 crores on a gross level number. So, the situation is improving quarter-on-quarter, if you see with respect to the Greenfield expansion performance.”

    Clarifies that the apparent increase in losses (from 31cr to 46cr) was due to one-time recoveries in the previous quarter, masking underlying operational improvement.

    asked by Siddhartha Bera, Nomura

    1 min read4 chapters

    Detailed Narrative

    01

    Greenfield Expansion Weighs on Near-Term Margins

    MSWIL's three new Greenfield facilities contributed ₹190 crores to revenue in Q2 FY26, but capacity utilization remains low at 36%. These units recorded an EBITDA loss of ₹46 crores during the quarter, which management explained was an improvement on a gross basis after adjusting for prior-period recoveries. Profitability for these units is expected only when utilization reaches the 70-80% threshold, a timeline that remains dependent on OEM customer ramp-ups.

    02

    EV Transition and Content Premiumization

    The company is seeing a steady shift toward Electric Vehicles, with the EV share of revenue rising to 7% from 5% in the previous quarter. Management highlighted that the EV shift leads to increased content per vehicle, particularly in high-voltage harnesses. While analysts questioned the margin profile of EV components, management emphasized that their focus remains on maintaining consistent Return on Capital Employed (ROCE) across all powertrain types.

    03

    Commodity Headwinds and Pass-Through Dynamics

    Copper prices, a critical raw material for wiring harnesses, increased by 13% year-on-year and 5% sequentially. MSWIL has contractual agreements to pass these costs to customers, but this occurs with a quarterly lag. This lag, combined with the higher copper content in newer vehicle models, has put temporary pressure📎 on raw material costs as a percentage of sales, though management expects these to be absorbed as volumes scale.

    04

    Operational Stability and Capex Outlook

    Staff costs have stabilized between ₹475 crores and ₹480 crores over the last two quarters. Management indicated that while shop floor hiring will continue in tandem with volume growth, the bulk of the Greenfield-related employee additions are likely reflected in current levels. The company has budgeted a Capex of ₹210 crores for FY26, focusing on supporting customer requirements and the ongoing ramp-up of new capacities.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.