21 August 2022

INDIA | AUTO ANCILLARIES |

COVERAGE INITIATION

Motherson Sumi Wiring India

Solid play on Premiumization & Electrication

Leadership position; Beneciary of megatrends: Initiate with BUY &

Strong parentage & Premiumization & TP of INR 100,
access to leading technologies Electrication implying 28% upside
21 August 2022 India | Auto Ancillaries | Initiating Coverage

Motherson Sumi Wiring India Ltd | BUY

Solid play on Premiumization & Electrification
Motherson Sumi Wiring India Limited (MSUMI), demerged out of Motherson Sumi System Ronak Mehta
(MSSL; now SAMIL), is a leading and fast-growing, full-system solutions provider to OEMs, in ronak.mehta@jmfl.com | Tel: (91 22) 66303125

the wiring harness segment in India. Over the years, the company has outperformed PV Vivek Kumar
vivek.kumar@jmfl.com | Tel: (91 22) 66303019
industry growth (by c.12%) and built leadership position in the domestic PV wiring harness
segment. MSUMI has leading market share, led by economies of scale (MSIL being anchor
client) and strong technology support from Sumitomo. Being a purely domestic focus
company, it is a proxy play on rising premiumization and electrification trend in the domestic
automotive industry over the longer-term. We initiate coverage with a BUY rating and
Sept’23 TP of INR 100 (35x PE; supported by DCF), implying 28% upside. Key risks include: 1)
technology switch owing to fast-changing global automotive industry, resulting in change in
Recommendation and Price Target
competitive landscape and 2) inability to maintain wallet share with existing key customers. Current Reco. BUY
 Significant outperformance in the domestic wiring harness: Excluding the Covid years, Previous Reco. NR
Current Price Target (12M) 100
while domestic PV volume CAGR over FY10-19 stood at c.6%, MSUMI’s revenue grew at
Upside/(Downside) 28.5%
CAGR c.18%, outperforming the underlying industry growth by c.12%. Rise in market Previous Price Target NA
share (MSUMI along with SAMIL-Kyungshin JV has over c.60% market share in domestic Change NA
PV wiring harness) and higher content per vehicle has helped MSUMI beat underlying
industry growth. It derives over c.95% of revenue from the domestic market diversified Key Data – MSUMI IN
across PVs, CVs, 2Ws, & OHT segments (~60%/11%/12%/6% revenue share in FY22). Current Market Price INR78
Market cap (bn) INR246.3/US$3.1
MSUMI (being purely focused on domestic wiring harness business) can be a quasi-play
Free Float 38%
on strong recovery in domestic automotive industry going ahead. Shares in issue (mn) 3,157.9
 Well positioned to leverage on Industry megatrends: Wiring harnesses are critical Diluted share (mn) 3,157.9
components required for controlling electronic systems, transmitting power and signals to 3-mon avg daily val (mn) INR381.4/US$4.8
52-week range 84/56
every part of the vehicle akin to the human body's blood vessels and nerves. Rise in Sensex/Nifty 59,646/17,758
customer preference towards premiumization (connected/autonomous vehicles) and INR/US$ 79.8
electrification is likely to drive the electronics content in a vehicle. This would in turn drive
higher wiring harness content (~2x of ICE PV). Being a leader in the industry with strong Price Performance
cost competitiveness, we expect MSUMI to maintain its leadership position in the % 1M 6M 12M
Absolute 0.3 0.0 0.0
emerging Indian EV landscape.
Relative* -5.8 0.0 0.0
 Multiple forces driving strong competitive advantage; industry leading financial metrics: * To the BSE Sensex
Over the years, MSUMI has built and sustained leadership position (relative revenue
market share of c.42%) led by: 1) End-to-end product design and development
capabilities, combined with high focus on localization; 2) strong customer relationship
across OEMs; 3) economies of scale (c.75-80% wallet share with MSIL) and 4) access to
world-class technology from strong parentage (SAMIL, holds ~33% stake; Sumitomo
Wiring holds ~25% stake). We expect MSUMI to continue it outperformance (revenue
CAGR c.18%) vs. domestic PV industry/MSIL (volume CAGR c.10%/13%) over FY22-25E
driven by higher content per vehicle. This will drive faster growth in profitability (expect
EBITDA/PAT CAGR 24%/25% over FY22-25E) led by premiumization, mix, positive
operating leverage and cost control. Strong positive FCF, high dividend pay-out ratio
(~60%) and low debt are expected to further strengthen its lean balance sheet with
return ratios crossing over ~50% by FY24E.

Financial Summary (INR mn)

Y/E March FY21A FY22A FY23E FY24E FY25E
Net Sales 39,377 56,350 69,374 81,449 92,645
Sales Growth (%) NA 43.1 23.1 17.4 13.7 JM Financial Research is also available on:
EBITDA 5,531 7,303 9,367 11,897 13,938 Bloomberg - JMFR <GO>,
EBITDA Margin (%) 14.0 13.0 13.5 14.6 15.0
Adjusted Net Profit 3,962 4,761 6,154 7,954 9,387
Thomson Publisher & Reuters,
Diluted EPS (INR) 1.3 1.5 1.9 2.5 3.0 S&P Capital IQ, FactSet and Visible Alpha
Diluted EPS Growth (%) NA 20.2 29.3 29.3 18.0
ROIC (%) 52.2 61.8 67.8 71.7 72.9 Please see Appendix I at the end of this
ROE (%) 111.7 52.2 49.9 52.6 50.5
report for Important Disclosures and
P/E (x) 63.8 53.1 41.1 31.8 26.9
P/B (x) 35.6 22.7 18.7 15.1 12.4 Disclaimers and Research Analyst
EV/EBITDA (x) 45.8 34.2 26.6 20.9 17.7 Certification.
Dividend Yield (%) NA 1.1 1.5 1.9 2.3
Source: Company data, JM Financial. Note: Valuations as of 19/Aug/2022

JM Financial Institutional Securities Limited

Motherson Sumi Wiring India Ltd 21 August 2022

Focus charts
Exhibit 1. FY10-19 (excluding Covid years) volume CAGR for Indian Exhibit 2. Revenue CAGR for MSUMI, led by increase in market share
PV industry has been 6% and rising premiumization, has been 18%
FY10-19 CAGR: 60 56
4.5 DWH outperformed PV industry
PV volume : 6% 4.0 4.0
3.8 capturing the premiumisation trend
4.0 SUV volume : 17% 50 45
3.6 (rising SUV penetration)
3.4 3.4 42 41
3.5 3.1 3.2 3.1 3.2 39
3.0 3.0 40 FY10-19 CAGR: DWH revenue: 18% 36
3.0
2.4 29 30
2.5 30 26 27
2.0 1.7 21
20 17
1.5 1.1 1.1 1.1 1.2
0.9 10
1.0 0.6 0.6 0.6 0.7
0.3 0.4 10
0.5 0.3

0.0 0

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22
FY13

FY15

FY17

FY19
FY10

FY11

FY12

FY14

FY16

FY18

FY20

FY21

FY22
India PV Volumes (Mn) India SUV Volumes (Mn) DWH Revenues (INR Bn)

Source: Company, JM Financial Source: Company, JM Financial

Exhibit 3. Revenue mix by segment Exhibit 4. Pure play on domestic automotive industry
Other
components Exports
11% 5%

Agri & Off-road

6%

Two-Wheelers
12%
Passenger
Vehicles Domestic
60% 95%
Commercial
Vehicles
11%

Source: Company, JM Financial Source: Company, JM Financial

Exhibit 5. Key players in the domestic market Exhibit 6. Relative revenue market share: MSUMI leads the industry
Key players Description Minda (Incl.
Furukawa JV)
14%
Key supplier to Hyundai and Kia is a JV between SAMIL and
Kyungshin
Kyungshin Corporation, South Korea.

Key supplier to Tata Motors. Parent - Yazaki Coporation, Japan, has

Yazaki India
global presence. MSUMI Yazaki India
42% 15%
Leading supplier for 2W wiring harness is a JV between Minda Corp
Furukawa Minda
and Furukawa Electric Co., Japan.

Dhoot Indian supplier of wiring harness to 2Ws, OHVs, CVs, and industrial
Transmission segment. Dhoot
Transmission
Leoni Wiring Subsidiary of Leoni AG, Germany, is a primary supplier to German Leoni Wiring 13%
Systems OEMs. Systems Kyungshin
1% 15%
Source: Company, Industry, JM Financial
Source: Company, Industry, JM Financial

JM Financial Institutional Securities Limited Page 3

Motherson Sumi Wiring India Ltd 21 August 2022

Exhibit 7. Rise in demand for connected/autonomous/electric vehicles present an opportunity to increase content

Source: Company, JM Financial

Exhibit 8. Expect revenue CAGR of c.18% over FY22-25E Exhibit 9. Expect EBITDA to grow at 24% CAGR over FY22-25E
100 16 14.6% 15.0% 16%
14.0%
13.5%
13.0% 14%
80
12 12%

60 10%

8 8%
92.6 13.9
40 81.4 6%
69.4 11.9
56.3 9.4
4 7.3 4%
20 39.4 5.5
2%

0 0 0%
FY21 FY22 FY23E FY24E FY25E FY21 FY22 FY23E FY24E FY25E

Net Sales (INR bn) EBITDA (INR bn) EBITDA Margin (%)

Source: Company, JM Financial Source: Company, JM Financial

Exhibit 10. Expect PAT CAGR of c.25% over FY22-25E Exhibit 11. Asset light balance sheet to drive returns
10 12% 80
10.1%
10.1% 9.8% 70
8.9% 10%
8 8.4% 60
8%
50
6
6% 40
9.4 71.7 72.9
4 8.0 67.8
30 59.5
4% 55.8 52.2 52.2 52.6
6.2 49.9 50.5
4.8 20
2 4.0 2%
10
0 0% 0
FY21 FY22 FY23E FY24E FY25E FY21 FY22 FY23E FY24E FY25E
Adj. PAT (INR bn) Adj. PAT Margin (%) ROE (%) ROIC (%)

Source: Company, JM Financial Source: Company, JM Financial

JM Financial Institutional Securities Limited Page 4

Motherson Sumi Wiring India Ltd 21 August 2022

Investment thesis
1) Industry beating growth; play on domestic automotive industry:

 Over FY10-19 (barring the Covid impacted years), while the domestic PV volume
grew at CAGR c.6%, MSUMI’s revenue grew at CAGR c.18%, outperforming the
underlying industry growth by c.12%. Rise in market share and higher content per
vehicle led by premiumization has helped MSUMI beat underlying industry growth.

 It offers solutions across vehicle types (passenger cars, two-wheelers and three-
wheelers as well as recreational, commercial and multi-utility vehicles), price ranges
(from entry-level to mid-range and premium level) and manufacturing locations. Its
revenue mix is well diversified with PV/CV/2W/OHV contributing about
60%/11%/12%/6%.

 MSUMI was demerged out of SAMIL to meet the strategic requirements of its long
standing partner Sumitomo Wiring Systems, Ltd. (SWS), who wanted to focus
primarily on the wiring harness segment in India. Thus, the company will primarily
focus on the Indian wiring harness market and will be quasi play on domestic
automotive industry.

Exhibit 12. FY10-19 (excluding Covid years) volume CAGR for Indian Exhibit 13. Revenue CAGR for MSUMI, led by increase in market
PV industry has been 6% share and rising premiumization, has been 18%
FY10-19 CAGR: 60 56
4.5 DWH outperformed PV industry
PV volume : 6% 4.0 4.0
3.8 capturing the premiumisation trend
4.0 SUV volume : 17% 50 45
3.6 (rising SUV penetration)
3.4 3.4 42 41
3.5 3.1 3.2 3.1 3.2 39
3.0 3.0 40 FY10-19 CAGR: DWH revenue: 18% 36
3.0
2.4 29 30
2.5 30 26 27
2.0 1.7 21
20 17
1.5 1.1 1.1 1.1 1.2
0.9 10
1.0 0.6 0.6 0.6 0.7
0.3 0.4 10
0.5 0.3

0.0 0
FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22
FY13

FY15

FY17

FY19
FY10

FY11

FY12

FY14

FY16

FY18

FY20

FY21

FY22

India PV Volumes (Mn) India SUV Volumes (Mn) DWH Revenues (INR Bn)

Source: SIAM, JM Financial Source: Company, JM Financial

Exhibit 14. Well diversified revenue mix…. Exhibit 15. ….play on domestic automotive industry
Other
components Exports
11% 5%

Agri & Off-road

6%

Two-Wheelers
12%
Passenger
Vehicles Domestic
60% 95%
Commercial
Vehicles
11%

Source: Company, JM Financial Source: Company, JM Financial

JM Financial Institutional Securities Limited Page 5

Motherson Sumi Wiring India Ltd 21 August 2022

2) Leadership position with sustainable competitive advantage:

 Motherson group (MSUMI along with MSSL-Kyungshin JV) dominates the domestic
PV wiring harness with >60% market share. MSUMI itself has over 50% share while
MSSL-Kyungshin JV has the balance market share.

 Starting its journey as a ‘Build-to-Print’ player in the domestic wiring harness with
MSIL (anchor customer with wallet share c.70%), over the years, MSUMI has
evolved as a full-system solution provider and has built large operational scale with
sheer dominance over its competitors. Strong parentage support from SAMIL (for
sourcing of wires and components, sharing of common support functions, strategic
guidance and leasing of land and building) and access to leading technologies
developed by Sumitomo Wiring Systems (SWS) will help it to sustain the dominance
in the domestic wiring harness industry.

Exhibit 16. Full-system solution provider with large operating scale Exhibit 17. Strong parentage and access to leading technologies

Source: Company, JM Financial Source: Company, JM Financial

Exhibit 18. Key players in the domestic market

Key players Description

Key supplier to Hyundai and Kia is a JV between SAMIL and Kyungshin Corporation, South
Kyungshin
Korea.

Yazaki India Key supplier to Tata Motors. Parent - Yazaki Coporation, Japan, has global presence.

Leading supplier for 2W wiring harness is a JV between Minda Corp and Furukawa Electric
Furukawa Minda
Co., Japan.

Dhoot Transmission Indian supplier of wiring harness to 2Ws, OHVs, CVs, and industrial segment.

Leoni Wiring Systems Subsidiary of Leoni AG, Germany, is a primary supplier to German OEMs.

Source: Industry, JM Financial

Exhibit 19. MSUMI leads the domestic wiring harness industry: Exhibit 20. MSUMI controls majority of the industry profit pool:
Relative revenue market share… Relative EBITDA market share…
Minda (Incl.
Minda (Incl. Furukawa JV)
Furukawa JV) 6.4%
14%
Yazaki India
3.3%

Dhoot
MSUMI Yazaki India Transmission
42% 15% 16.4%

Kyungshin
3.8%
Dhoot Leoni Wiring
Transmission MSUMI Systems
Leoni Wiring 13% 69.1% 0.9%
Systems Kyungshin
1% 15%
Source: VCCircle, Industry, JM Financial Source: VCCircle, Industry, JM Financial

JM Financial Institutional Securities Limited Page 6

Motherson Sumi Wiring India Ltd 21 August 2022

3) Well positioned to leverage on Industry megatrends:

 MSUMI is well-positioned to take advantage of rapidly changing trends in the In an EV, roughly 75-80% of the
automotive market. The rising demand for customisation leads to more wiring wiring harness remains low-voltage
harnesses per vehicle (increase in content per vehicle). Similarly, more connected and the engine related wiring
features in a vehicle leads to increase in demand for high-value harness harness is replaced with high-
components. Also, with the increase in demand for sustainable technologies and voltage wiring harness.
advanced safety and emission norms, the value per harness goes up and so do the
electronics and EV solutions offered by MSUMI. Wiring harness in an EV
 For electric vehicles/alternate powertrains, the company (with support from SWS, a
global leader in wiring harnesses for alternate powertrain solutions) is fully equipped
to provide high-voltage solutions, wiring harnesses and components. SWS has
developed several components that are specific to EV/hybrid vehicles.

 Rise in customer preference towards premiumization (connected/autonomous

vehicles) and electrification is likely to drive the electronics content in a vehicle. This
would in turn drive higher content (~2x of ICE PV). Being a leader in the industry
with strong cost competitiveness, we expect MSUMI to maintain its leadership
position in the emerging Indian EV landscape.

 MSUMI has setup a dedicated line at Chennai for high-voltage harnesses to meet
the demand for EV/hybrid vehicles (PV, CV & Two-Wheeler), augmenting the high
voltage facilities already existing in Pune.

Exhibit 21. Rise in demand for connected/autonomous/electric vehicles present an opportunity to increase content

Source: Company, JM Financial

Exhibit 22. Content opportunity of ~2.5x in BEV vs. ICE PV Exhibit 23. Content opportunity of ~2x in EV scooters vs. ICE scooter
1,400 2,500
1,200 2,000-2,500
1,200
2,000
1,000

1,500 1,100-1,500
800

600 500 1,000

400
500
200

- -
ICE PV EV PV ICE Scooter EV Scooter

Content per vehicle (USD) Content per vehicle (INR)

Source: Aptiv, JM Financial Source: Industry, JM Financial

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Motherson Sumi Wiring India Ltd 21 August 2022

Industry leading financial metrics & Valuation view

 MSUMI is a leading, domestic-focused, well-diversified, automotive components
company presenting a proxy play on recovery in domestic auto industry. Rising
premiumization and electrification trend poses opportunity for MSUMI to increase
its content per vehicle and thus grow faster than the underlying domestic
automotive industry over the medium-to-longer term.

 We expect MSUMI’s revenue to grow at c.18% CAGR over FY22-25E driven by

increase in content per vehicle and recovery in underlying industry. We believe that
MSUMI will continue to outperform the both domestic PV industry (c.10% volume
CAGR over FY22-25E) and MSIL (c.13% volume CAGR over FY22-25%).

 This will drive faster growth in profitability. We expect MSUMI’s EBITDA margin to
expand from c.13% in FY22 to c.15% in FY25 led by premiumization, mix, positive
operating leverage, improved efficiencies (as it scales up EV business) and cost
control initiatives. Recent softening in commodity prices will provide support to
margins.

 PAT CAGR is expected at c.25% over FY22-25E. Strong positive FCF, high dividend
pay-out ratio (~60%) and low debt are expected to further strengthen its lean
balance sheet with return ratios crossing over ~50% in FY24E.

Exhibit 24. Expect c.18% revenue CAGR over FY22-25E Exhibit 25. Expect c.24% EBITDA CAGR over FY22-25E
100 16 14.6% 15.0% 16%
14.0%
13.5%
13.0% 14%
80
12 12%

60 10%

8 8%
92.6
40 81.4 13.9
69.4 11.9 6%
56.3 9.4
4 7.3 4%
20 39.4 5.5
2%

0 0 0%
FY21 FY22 FY23E FY24E FY25E FY21 FY22 FY23E FY24E FY25E
Net Sales (INR bn) EBITDA (INR bn) EBITDA Margin (%)

Source: Company, JM Financial Source: Company, JM Financial

Exhibit 26. PAT is expected to grow at c.25% CAGR Exhibit 27. ROE will moderate over FY22-25E due to cash drag
10 12% 80
10.1%
10.1% 9.8% 70
8.9% 10%
8 8.4% 60
8%
50
6
6% 40
9.4 71.7 72.9
4 8.0 67.8
30 59.5
4% 55.8 52.2 52.2 52.6
6.2 49.9 50.5
4.8 20
2 4.0 2%
10
0 0% 0
FY21 FY22 FY23E FY24E FY25E FY21 FY22 FY23E FY24E FY25E
Adj. PAT (INR bn) Adj. PAT Margin (%) ROE (%) ROIC (%)

Source: Company, JM Financial Source: Company, JM Financial

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Motherson Sumi Wiring India Ltd 21 August 2022

Exhibit 28. Sourcing agreement between MSUMI-SAMIL/SWS offer synergies for next 10 years
Incremental due 9MFY21 (% of Proposed cap (% of
Nature Description
to reorganization revenue) revenue)
From SAMIL: 32% From SAMIL: 34.5% Wires, connectors, tubes, plastic components and any other child parts of wire
MSUMI Sourcing No
From SWS: 14.1% From SWS: 17.5% harness / pass through parts (including capital items)

MSUMI Sale No 1.3% 2% Supply of Wiring harnesses and parts / components thereof

FY22: Rs600mn.
MSUMI Lease Rentals Yes 1.6% (INR429mn) Annual escalation of Lease rentals for existing land and building
5% p.a.
Rendering of functional support services, including engineering and design services,
Functional Support Services No 3.8% 5.0% finance, purchase, logistics, HR, Treasury etc. and sharing of manpower to deliver
such services to be provided by SAMIL entities

Technical Assistance No 0.6% 1.0% With SWS for technical assistance

Management Service Yes 0.6% 1.0% With SAMIL for strategic guidance and management support

Car Leasing Arrangement No 0.2% 0.5% Leasing arrangements of vehicles for employees

Source: Company, JM Financial

Valuation view
 MSUMI is currently trading at ~41x/32x FY23E/24E EPS. We believe the company
deserves rich valuations owing to its: a) market leadership and strong competitive
positioning (outperformed underlying industry by c.12% CAGR over FY10-19;
>60% market share in domestic PV wiring harness), b) industry leading return ratios
with lean balance sheet (ROE>50%; ROIC increasing to >70%). MSUMI is well
placed to leverage on industry megatrends such as EVs, connectivity, etc. We value
the company at ~35x Sept’24E EPS, supported by 15-yr DCF. We initiate coverage
with a BUY rating and Sept’23 TP of INR 100, implying a 28% upside.

Exhibit 29. Peer valuation

Market cap CAGR FY22-24E ROE PE (x) EV/EBITDA (x)
Company
(INR bn) Revenue EBITDA PAT FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E
Motherson Sumi Wiring 252.0 20.2 27.6 39.2 52.2 49.9 52.6 52.7 40.7 31.5 34.0 26.4 20.7
SAMIL 594.5 10.2 28.8 69.1 5.3 8.5 14.2 95.5 32.3 18.4 16.4 11.9 9.4
Bosch 523.8 18.4 27.2 22.2 11.9 13.8 15.1 35.0 36.0 28.8 27.3 26.1 21.1
Bharat Forge 350.6 11.1 16.9 18.9 18.1 16.7 18.5 30.2 29.5 22.9 18.2 17.2 14.3
Sona BLW 308.0 39.0 40.1 36.9 21.9 20.2 25.7 109.2 69.4 45.2 71.0 40.8 27.9
Uno Minda 317.9 22.4 33.5 56.6 12.5 15.8 19.0 88.9 50.9 36.3 28.5 20.9 16.0
Endurance Technologies 205.0 17.4 26.7 36.8 12.3 15.0 17.5 33.4 32.1 23.8 15.5 16.3 12.9
ZF Commercial Vehicle 184.5 31.8 60.7 76.0 6.9 12.9 16.4 101.9 62.2 41.9 52.2 37.3 26.1
Mahindra CIE Automotive 106.8 14.4 17.7 37.8 7.8 11.6 12.8 22.6 17.9 14.3 9.4 9.7 8.5
Suprajit Engineering 46.5 31.8 29.5 25.3 16.7 15.5 19.6 27.4 25.2 17.1 17.8 14.4 10.4
Minda Corp 53.9 24.8 36.4 27.4 15.5 16.4 18.4 25.3 22.4 17.0 17.4 12.7 10.1
Source: Company, JM Financial

Key risks:
 Technology switches owing to fast-changing global automotive industry, resulting in
change in the competitive landscape.
 Inability to maintain wallet share with existing key customers.

JM Financial Institutional Securities Limited Page 9

Motherson Sumi Wiring India Ltd 21 August 2022

About the Company

 Motherson Sumi Wiring India Limited (MSUMI) is a leading full-system solutions Wiring harnesses are critical
provider to OEMs, in the wiring harness segment in India. It offers solutions across components required for controlling
vehicle types (passenger cars, two-wheelers and three-wheelers as well as electronic systems, transmitting
recreational, commercial and multi-utility vehicles), price ranges (from entry-level to power and signals to every part of
mid-range and premium level) and manufacturing locations. the vehicle akin to the human
body's blood vessels and nerves.
 It has capability to meet customer needs, from the initial product design and
validation to final production of integrated cutting edge electrical & electronic
distribution systems for the power supply or data transfer across vehicles. It is a Wiring harness in an EV
global leader in wiring harnesses, harness components, and other electric wires.

 The company started its journey in 1986 when Motherson Sumi Systems (MSSL) was
established as a joint venture with Sumitomo Wiring Systems (SWS), Japan. MSUMI
was established as a result of the demerger of the wiring harness business of India
from its parent company MSSL.

 The company is headquartered at Noida, India, and operates through its 23 facilities
consisting of manufacturing and assembly sites and technical centres across India.

Exhibit 30. MSUMI was formed out of vertical demerger of domestic wiring harness business

Source: Company, JM Financial

Exhibit 31. 23 Wiring harness plants in India in close proximity to customer locations

Source: Company, JM Financial

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Motherson Sumi Wiring India Ltd 21 August 2022

Exhibit 32. Strong customer relationship across OEMs

Source: Company, JM Financial

Exhibit 33. Management team

Name Designation

Mr. Vivek Chaand Sehgal Chairman, Non-executive, Non Independent, Director,

Mr. Laksh Vaaman Sehgal Non-executive, Non Independent Director

Mr. Norikatsu Ishida Non-executive, Non Independent Director

Mr. Yoshio Matsushita Non-executive, Non Independent Director

Mr. Anurag Gahlot Whole-time Director & Chief Operating Officer, Executive Director

Mr. G.N. Gauba Chief Financial Officer

Source: Company, JM Financial

JM Financial Institutional Securities Limited Page 11

Motherson Sumi Wiring India Ltd 21 August 2022

Financial Tables (Standalone)

Income Statement (INR mn) Balance Sheet (INR mn)
Y/E March FY21A FY22A FY23E FY24E FY25E Y/E March FY21A FY22A FY23E FY24E FY25E
Net Sales 39,377 56,350 69,374 81,449 92,645 Shareholders’ Fund 7,096 11,146 13,510 16,727 20,430
Sales Growth NA 43.1% 23.1% 17.4% 13.7% Share Capital 1 3,158 3,158 3,158 3,158
Total Revenue 39,377 56,350 69,374 81,449 92,645 Reserves & Surplus 7,096 7,988 10,352 13,569 17,272
Cost of Goods Sold/Op. Exp 25,111 36,093 44,399 51,883 58,922 Preference Share Capital 0 0 0 0 0
Personnel Cost 6,535 9,464 11,168 12,619 14,134 Minority Interest 0 0 0 0 0
Other Expenses 2,200 3,490 4,440 5,050 5,651 Total Loans 818 193 193 193 193
EBITDA 5,531 7,303 9,367 11,897 13,938 Def. Tax Liab. / Assets (-) -259 -403 -403 -403 -403
EBITDA Margin 14.0% 13.0% 13.5% 14.6% 15.0% Total - Equity & Liab. 7,655 10,936 13,300 16,517 20,220
EBITDA Growth NA 32.0% 28.3% 27.0% 17.2% Net Fixed Assets 1,699 4,645 5,263 5,940 6,471
Depn. & Amort. 374 1,055 1,181 1,323 1,469 Gross Fixed Assets 4,150 7,814 9,614 11,614 13,614
EBIT 5,157 6,248 8,186 10,574 12,469 Intangible Assets 0 0 0 0 0
Other Income 236 300 330 370 414 Less: Depn. & Amort. 2,453 3,492 4,674 5,997 7,466
Finance Cost 73 285 300 324 350 Capital WIP 1 323 323 323 323
PBT before Excep. & Forex 5,320 6,263 8,216 10,620 12,533 Investments 184 393 393 393 393
Excep. & Forex Inc./Loss(-) 0 0 0 0 0 Current Assets 15,751 20,176 24,032 28,529 33,515
PBT 5,320 6,263 8,216 10,620 12,533 Inventories 7,986 9,600 11,629 13,430 15,022
Taxes 1,358 1,502 2,062 2,666 3,146 Sundry Debtors 6,749 6,593 8,117 9,530 10,840
Extraordinary Inc./Loss(-) 0 -654 0 0 0 Cash & Bank Balances 373 2,933 3,236 4,519 6,603
Assoc. Profit/Min. Int.(-) 0 0 0 0 0 Loans & Advances 0 0 0 0 0
Reported Net Profit 3,962 4,107 6,154 7,954 9,387 Other Current Assets 644 1,050 1,050 1,050 1,050
Adjusted Net Profit 3,962 4,761 6,154 7,954 9,387 Current Liab. & Prov. 9,979 14,279 16,389 18,345 20,159
Net Margin 10.1% 8.4% 8.9% 9.8% 10.1% Current Liabilities 7,517 9,129 11,239 13,196 15,010
Diluted Share Cap. (mn) 3,157.9 3,157.9 3,157.9 3,157.9 3,157.9 Provisions & Others 2,463 5,149 5,149 5,149 5,149
Diluted EPS (INR) 1.3 1.5 1.9 2.5 3.0 Net Current Assets 5,772 5,898 7,643 10,184 13,356
Diluted EPS Growth NA 20.2% 29.3% 29.3% 18.0% Total – Assets 7,655 10,936 13,300 16,517 20,220
Total Dividend + Tax NA 2,684 3,789 4,737 5,684 Source: Company, JM Financial
Dividend Per Share (INR) NA 0.9 1.2 1.5 1.8
Source: Company, JM Financial

Cash Flow Statement (INR mn)

Y/E March FY21A FY22A FY23E FY24E FY25E
Dupont Analysis
Profit before Tax 5,320 6,263 8,216 10,620 12,533
Y/E March FY21A FY22A FY23E FY24E FY25E
Depn. & Amort. 374 1,055 1,181 1,323 1,469
Net Margin 10.1% 8.4% 8.9% 9.8% 10.1%
Net Interest Exp. / Inc. (-) 73 285 300 324 350
Asset Turnover (x) 10.0 5.9 5.5 5.3 4.9
Inc (-) / Dec in WCap. -4,454 44 -1,443 -1,258 -1,088
Leverage Factor (x) 1.1 1.1 1.0 1.0 1.0
Others -293 -977 -330 -370 -414
Taxes Paid -1,142 -1,962 -2,062 -2,666 -3,146 RoE 111.7% 52.2% 49.9% 52.6% 50.5%

Operating Cash Flow -122 4,708 5,862 7,974 9,704

Capex -281 -1,008 -1,800 -2,000 -2,000 Key Ratios
Free Cash Flow -403 3,699 4,062 5,974 7,704 Y/E March FY21A FY22A FY23E FY24E FY25E

Inc (-) / Dec in Investments 0 0 0 0 0 BV/Share (INR) 2.2 3.5 4.3 5.3 6.5
Others 236 300 330 370 414 ROIC 52.2% 61.8% 67.8% 71.7% 72.9%
Investing Cash Flow -45 -708 -1,470 -1,630 -1,586 ROE 111.7% 52.2% 49.9% 52.6% 50.5%
Inc / Dec (-) in Capital 1 0 0 0 0 Net Debt/Equity (x) 0.1 -0.2 -0.2 -0.3 -0.3
Dividend + Tax thereon 0 0 -3,789 -4,737 -5,684 P/E (x) 63.8 53.1 41.1 31.8 26.9
Inc / Dec (-) in Loans 365 -679 0 0 0 P/B (x) 35.6 22.7 18.7 15.1 12.4
Others -116 -760 -300 -324 -350 EV/EBITDA (x) 45.8 34.2 26.6 20.9 17.7
Financing Cash Flow 250 -1,439 -4,089 -5,061 -6,034 EV/Sales (x) 6.4 4.4 3.6 3.0 2.7
Inc / Dec (-) in Cash 83 2,561 303 1,283 2,084 Debtor days 63 43 43 43 43
Opening Cash Balance 290 373 2,933 3,236 4,519 Inventory days 74 62 61 60 59
Closing Cash Balance 373 2,933 3,236 4,519 6,603 Creditor days 81 68 68 69 70
Source: Company, JM Financial Source: Company, JM Financial

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Motherson Sumi Wiring India Ltd 21 August 2022

APPENDIX I

JM Financial Inst itut ional Secur ities Lim ited

Corporate Identity Number: U67100MH2017PLC296081
Member of BSE Ltd., National Stock Exchange of India Ltd. and Metropolitan Stock Exchange of India Ltd.
SEBI Registration Nos.: Stock Broker - INZ000163434, Research Analyst – INH000000610
Registered Office: 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India.
Board: +9122 6630 3030 | Fax: +91 22 6630 3488 | Email: jmfinancial.research@jmfl.com | www.jmfl.com
Compliance Officer: Mr. Sunny Shah | Tel: +91 22 6630 3383 | Email: sunny.shah@jmfl.com

Definition of ratings
Rating Meaning
Buy Total expected returns of more than 10% for large-cap stocks* and REITs and more than 15% for all other stocks, over the next twelve
months. Total expected return includes dividend yields.
Hold Price expected to move in the range of 10% downside to 10% upside from the current market price for large-cap* stocks and REITs and
in the range of 10% downside to 15% upside from the current market price for all other stocks, over the next twelve months.
Sell Price expected to move downwards by more than 10% from the current market price over the next twelve months.
* Large-cap stocks refer to securities with market capitalisation in excess of INR200bn. REIT refers to Real Estate Investment Trusts.
Research Analyst(s) Certification

The Research Analyst(s), with respect to each issuer and its securities covered by them in this research report, certify that:

All of the views expressed in this research report accurately reflect his or her or their personal views about all of the issuers and their securities; and

No part of his or her or their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research
report.

Important Disclosures

This research report has been prepared by JM Financial Institutional Securities Limited (JM Financial Institutional Securities) to provide information about the
company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its associates solely for the purpose of information of the select
recipient of this report. This report and/or any part thereof, may not be duplicated in any form and/or reproduced or redistributed without the prior written
consent of JM Financial Institutional Securities. This report has been prepared independent of the companies covered herein.
JM Financial Institutional Securities is registered with the Securities and Exchange Board of India (SEBI) as a Research Analyst and a Stock Broker having trading
memberships of the BSE Ltd. (BSE), National Stock Exchange of India Ltd. (NSE) and Metropolitan Stock Exchange of India Ltd. (MSEI). No material disciplinary
action has been taken by SEBI against JM Financial Institutional Securities in the past two financial years which may impact the investment decision making of the
investor.
JM Financial Institutional Securities renders stock broking services primarily to institutional investors and provides the research services to its institutional
clients/investors. JM Financial Institutional Securities and its associates are part of a multi-service, integrated investment banking, investment management,
brokerage and financing group. JM Financial Institutional Securities and/or its associates might have provided or may provide services in respect of managing
offerings of securities, corporate finance, investment banking, mergers & acquisitions, broking, financing or any other advisory services to the company(ies)
covered herein. JM Financial Institutional Securities and/or its associates might have received during the past twelve months or may receive compensation from
the company(ies) mentioned in this report for rendering any of the above services.
JM Financial Institutional Securities and/or its associates, their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell
the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) covered under this report or (c) act as an advisor or lender/borrower to,
or may have any financial interest in, such company(ies) or (d) considering the nature of business/activities that JM Financial Institutional Securities is engaged in,
it may have potential conflict of interest at the time of publication of this report on the subject company(ies).
Neither JM Financial Institutional Securities nor its associates or the Research Analyst(s) named in this report or his/her relatives individually own one per cent or
more securities of the company(ies) covered under this report, at the relevant date as specified in the SEBI (Research Analysts) Regulations, 2014.
The Research Analyst(s) principally responsible for the preparation of this research report and members of their household are prohibited from buying or selling
debt or equity securities, including but not limited to any option, right, warrant, future, long or short position issued by company(ies) covered under this report.
The Research Analyst(s) principally responsible for the preparation of this research report or their relatives (as defined under SEBI (Research Analysts) Regulations,
2014); (a) do not have any financial interest in the company(ies) covered under this report or (b) did not receive any compensation from the company(ies) covered
under this report, or from any third party, in connection with this report or (c) do not have any other material conflict of interest at the time of publication of this
report. Research Analyst(s) are not serving as an officer, director or employee of the company(ies) covered under this report.
While reasonable care has been taken in the preparation of this report, it does not purport to be a complete description of the securities, markets or
developments referred to herein, and JM Financial Institutional Securities does not warrant its accuracy or completeness. JM Financial Institutional Securities may
not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This
report is provided for information only and is not an investment advice and must not alone be taken as the basis for an investment decision.

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Motherson Sumi Wiring India Ltd 21 August 2022

The investment discussed or views expressed or recommendations/opinions given herein may not be suitable for all investors. The user assumes the entire risk of
any use made of this information. The information contained herein may be changed without notice and JM Financial Institutional Securities reserves the right to
make modifications and alterations to this statement as they may deem fit from time to time.
This report is neither an offer nor solicitation of an offer to buy and/or sell any securities mentioned herein and/or not an official confirmation of any transaction.
This report is not directed or intended for distribution to, or use by any person or entity who is a citizen or resident of or located in any locality, state, country or
other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject JM Financial Institutional
Securities and/or its affiliated company(ies) to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be
eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this report may come, are required to inform themselves of
and to observe such restrictions.
Persons who receive this report from JM Financial Singapore Pte Ltd may contact Mr. Ruchir Jhunjhunwala (ruchir.jhunjhunwala@jmfl.com) on +65 6422 1888 in
respect of any matters arising from, or in connection with, this report.
Additional disclosure only for U.S. persons: JM Financial Institutional Securities has entered into an agreement with JM Financial Securities, Inc. ("JM Financial
Securities"), a U.S. registered broker-dealer and member of the Financial Industry Regulatory Authority ("FINRA") in order to conduct certain business in the
United States in reliance on the exemption from U.S. broker-dealer registration provided by Rule 15a-6, promulgated under the U.S. Securities Exchange Act of
1934 (the "Exchange Act"), as amended, and as interpreted by the staff of the U.S. Securities and Exchange Commission ("SEC") (together "Rule 15a-6").
This research report is distributed in the United States by JM Financial Securities in compliance with Rule 15a-6, and as a "third party research report" for
purposes of FINRA Rule 2241. In compliance with Rule 15a-6(a)(3) this research report is distributed only to "major U.S. institutional investors" as defined in Rule
15a-6 and is not intended for use by any person or entity that is not a major U.S. institutional investor. If you have received a copy of this research report and are
not a major U.S. institutional investor, you are instructed not to read, rely on, or reproduce the contents hereof, and to destroy this research or return it to JM
Financial Institutional Securities or to JM Financial Securities.
This research report is a product of JM Financial Institutional Securities, which is the employer of the research analyst(s) solely responsible for its content. The
research analyst(s) preparing this research report is/are resident outside the United States and are not associated persons or employees of any U.S. registered
broker-dealer. Therefore, the analyst(s) are not subject to supervision by a U.S. broker-dealer, or otherwise required to satisfy the regulatory licensing
requirements of FINRA and may not be subject to the Rule 2241 restrictions on communications with a subject company, public appearances and trading
securities held by a research analyst account.
JM Financial Institutional Securities only accepts orders from major U.S. institutional investors. Pursuant to its agreement with JM Financial Institutional Securities,
JM Financial Securities effects the transactions for major U.S. institutional investors. Major U.S. institutional investors may place orders with JM Financial
Institutional Securities directly, or through JM Financial Securities, in the securities discussed in this research report.
Additional disclosure only for U.K. persons: Neither JM Financial Institutional Securities nor any of its affiliates is authorised in the United Kingdom (U.K.) by the
Financial Conduct Authority. As a result, this report is for distribution only to persons who (i) have professional experience in matters relating to investments
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii)
are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order, (iii) are outside
the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000) in connection with the matters to which this report relates may otherwise lawfully be communicated or caused to be
communicated (all such persons together being referred to as "relevant persons"). This report is directed only at relevant persons and must not be acted on or
relied on by persons who are not relevant persons. Any investment or investment activity to which this report relates is available only to relevant persons and will
be engaged in only with relevant persons.
Additional disclosure only for Canadian persons: This report is not, and under no circumstances is to be construed as, an advertisement or a public offering of the
securities described herein in Canada or any province or territory thereof. Under no circumstances is this report to be construed as an offer to sell securities or as
a solicitation of an offer to buy securities in any jurisdiction of Canada. Any offer or sale of the securities described herein in Canada will be made only under an
exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable
securities laws or, alternatively, pursuant to an exemption from the registration requirement in the relevant province or territory of Canada in which such offer or
sale is made. This report is not, and under no circumstances is it to be construed as, a prospectus or an offering memorandum. No securities commission or
similar regulatory authority in Canada has reviewed or in any way passed upon these materials, the information contained herein or the merits of the securities
described herein and any representation to the contrary is an offence. If you are located in Canada, this report has been made available to you based on your
representation that you are an “accredited investor” as such term is defined in National Instrument 45-106 Prospectus Exemptions and a “permitted client” as
such term is defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Under no circumstances is the
information contained herein to be construed as investment advice in any province or territory of Canada nor should it be construed as being tailored to the
needs of the recipient. Canadian recipients are advised that JM Financial Securities, Inc., JM Financial Institutional Securities Limited, their affiliates and authorized
agents are not responsible for, nor do they accept, any liability whatsoever for any direct or consequential loss arising from any use of this research report or the
information contained herein.

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