Motherson Sumi Wiring India Limited — Q3 FY25 earnings call

Call held 6 Feb 2025

Management summary

Motherson Wiring delivered a resilient performance in Q3 FY25, significantly outpacing industry growth despite sequential headwinds in the PV and 2W segments. The quarter was characterized by heavy investment in three new Greenfield facilities (Pune, Navagam, and Kharkhoda), which temporarily suppressed margins but are positioned to provide a 25% revenue jump upon full ramp-up. Management remains focused on localization and premiumization, particularly in high-voltage EV harnesses, while maintaining a debt-free balance sheet.

Highlights

  • Quarterly revenue reached ₹2,300 crores, with new Greenfield projects contributing ₹80 crores.

  • Company outpaced the industry growth by approximately 6%, driven by favorable product mix and increased content per vehicle.

  • EBITDA (excluding Greenfields) stood at ₹278 crores, representing a 6.1% YoY growth.

  • Greenfield startup costs had a negative impact of ₹40 crores on EBITDA and ₹32 crores on PAT for the quarter.

  • Total startup cost impact for the first 9 months of FY25 reached ₹95 crores.

  • Three new Greenfield facilities are expected to drive an annual revenue boost of approximately ₹2,100 crores (25% growth over FY24 baseline).

  • EV segment currently contributes between 3% to 4% of total revenue.

  • Maintained debt-free status with a full-year CAPEX guidance of approximately ₹200 crores.

Concerns

  • Greenfield Startup Costs

Key financials

2 periods

Headline

  • Revenue
    ₹2,300 Cr
  • EBITDA (Ex-Greenfields)
    ₹278 Cr
    YoY +6.1%
  • Greenfield EBITDA Impact
    ₹-40 Cr
  • Greenfield PAT Impact
    ₹-32 Cr

9M

  • Startup Costs
    ₹95 Cr

What they filed

Q1 FY27: revenue up 36.6%, net profit up 1.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,326 2,300 2,510 2,494 2,762 +19%2,887 +26%3,335 +33%3,407 +37%
EBITDA250 238 271 244 280 +12%262 +10%274 +1%258 +6%
Net profit152 140 165 143 165 +9%149 +6%167 +1%145 +1%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Passenger Vehicles (PV)
    59% Revenue Mix
  • Two-Wheelers (2W)
    11% Revenue Mix
  • Commercial Vehicles (CV)
    11% Revenue Mix

Guidance & targets

Revenue

  • Incremental Annual Revenue from Greenfields Revenue · FY26 · High confidence ₹2,100 crores
    These are new facilities and will cumulatively drive an annual revenue boost of approximately 2,100 crores marking approximately 25% growth over Financial Year ‘24 revenues on a baseline.

    — V.C. Sehgal, Chairman

Capex

  • Full Year CAPEX Guidance Capex · FY25 · High confidence ₹200 crores
    Our CAPEX guidance for the year remains at approximately 200 crores, have expensed about 133 in 9 months.

    — V.C. Sehgal, Chairman

Capacity

  • Greenfield Operational Timeline Capacity · H2 FY26 · Medium confidence H2 2026
    Pune ramping up while Navagam and Kharkhoda are set to be on stream H2 2026.

    — V.C. Sehgal, Chairman

Profitability

  • Startup Cost Normalization Profitability · Q3 FY26 · Medium confidence Q2-Q3 FY26
    So, around that period, Q2 of FY26, Q2-Q3, that is the time when it should get normalised completely over a period of time.

    — Pankaj Mital, COO SAMIL

Risks & concerns

  • Greenfield Startup Costs

    high

    ₹40 crore EBITDA hit in Q3 alone; costs are expensed upfront before full revenue realization.

    Management acknowledged

  • Industry Slowdown

    medium

    Sequential de-growth in PV (-8%) and 2W (-5%) industries impacting volume baseline.

    Both acknowledged

  • Currency Volatility (USD/INR)

    low

    Management confirmed pass-through arrangements are in place with almost every customer.

    Analyst downplayed

Areas of evasion (2)

  • Specific market share numbers
  • Detailed breakdown of copper price impact on revenue growth

Q&A highlights

2 direct, 1 evasive
Greenfield Startup Cost Impact Direct
So, this 40 crore EBITDA impact is for the 3rd Quarter from the 3 new Greenfields that we mentioned.

Clarifies that the margin pressure is a significant but temporary quarterly hit specifically tied to new capacity expansion.

Asked by Jinesh Gandhi, Ambit Capital

EV Revenue Contribution Direct
See, generally the revenue coming from EV vehicles have been in between 3% to 4% approximately, I mean ballpark.

Provides a baseline for the company's current exposure to the EV transition in India.

Asked by Siddhartha Bera, Nomura

Correlation between Copper Prices and Growth Evasive
Look, your calculations are based on what? On your calculations or it is some kind of a standard or something?

Management was defensive regarding the impact of copper inflation on reported growth, highlighting a potential area of analyst concern regarding pass-through mechanisms.

Asked by Shirish, Nippon India Mutual Funds

2 min read 5 chapters

Detailed narrative

Greenfield Expansion as a Growth Engine

Motherson Wiring is aggressively expanding its footprint with three new Greenfield facilities in Pune, Navagam, and Kharkhoda. These plants are not merely for replacements but are dedicated to entirely new models from marquee OEMs like Maruti Suzuki, Mahindra, and Tata Motors. Management expects these facilities to cumulatively generate ₹2,100 crores in annual revenue, which would represent a 25% increase over the FY24 revenue baseline. While Pune is currently ramping up, the other two sites are slated to come on stream in the second half of 2026.

Short-term Margin Compression from Startup Costs

The company's financial performance in Q3 was significantly impacted by upfront expenses related to these new facilities. A net negative impact of ₹40 crores was recorded at the EBITDA level, with a corresponding ₹32 crore hit to PAT. For the first nine months of the fiscal year, these startup costs have totaled ₹95 crores. Management expects these costs to begin normalizing between Q2 and Q3 of FY26 as production volumes across the new plants stabilize.

Outpacing Industry through Premiumization

Despite a broader industry slowdown—where the Indian PV industry saw an 8% sequential de-growth—Motherson Wiring managed to outpace the industry by approximately 6%. This outperformance is attributed to a favorable product portfolio and increased content per vehicle as OEMs launch feature-rich models across both EV and ICE platforms. The company remains the preferred supplier for new-age vehicles, focusing on high-value components like high-voltage wiring harnesses.

EV Transition and Localization Efforts

The EV segment currently accounts for 3% to 4% of the company's revenue. Motherson is actively working on localizing high-voltage wiring harness components, including cables and connectors, to reduce import content. While some components for global car makers are still designed externally and imported, the long-term strategy is to localize these as volumes grow and new models are launched in the Indian market.

Financial Discipline and Capital Allocation

Motherson Wiring maintains a strong balance sheet, remaining a debt-free company. The CAPEX guidance for the full year is maintained at approximately ₹200 crores, with ₹133 crores already deployed in the first nine months. The investment per plant is relatively modest at ₹40 to ₹60 crores (excluding land and buildings, which are leased from the parent SAMIL), demonstrating an asset-light approach to capacity expansion.

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