At a Glance
Motherson Sumi Wiring India Ltd, a joint venture between Sumitomo and Motherson Group, dominates India’s wiring harness industry with over 40% market share. Despite a P/E of 47x and a 16.9x book multiple, ROCE and ROE are electric at 42%+ and 36%. But is the stock still plugged into growth — or is it overheating?
1. Introduction with Hook 🎣
Let’s be honest — wiring harnesses are the most underappreciated part of a car. No Bollywood song is written about copper wires behind the dashboard.
But while everyone’s flexing about EVs, chips, and AI, Motherson Sumi Wiring (MSWIL) is silently raking in profits from what’s essentially the nervous system of every vehicle.
Post demerger in 2022, MSWIL has become a pure-play wiring harness beast. But at 47x earnings, should you short-circuit your logic and chase it?
2. WTF Do They Even Do? 🧩
- MSWIL manufactures automotive wiring harnesses for Indian OEMs.
- The company was demerged from Samvardhana Motherson in 2022 to streamline the India-focused harness biz.
- JV with Sumitomo Wiring Systems (Japan) – global scale, local cost.
- Major clients: Maruti Suzuki, Hyundai, Tata Motors, Toyota and pretty much any car that has wires.
So yeah — every time you honk, MSWIL earns a paisa.
3. Financials Overview – Profit, Margins, ROE 💰
📈 FY21 to FY25 Trend:
| Metric | FY21 | FY23 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 3,938 | 7,068 | 9,320 |
| EBITDA Margin (%) | 14% | 11% | 11% |
| Net Profit (₹ Cr) | 396 | 487 | 606 |
| ROE (%) | – | 44% | 36% |
| EPS (₹) | – | 1.10 | 1.37 |
- Sales doubled in 4 years – nice.
- Margins? Slipping slightly. From 14% to 11%.
- Net profit CAGR: ~11% — not EV-like growth, but stable.
- ROE of 36% means this company prints money efficiently.
4. Valuation – Is It Cheap, Meh, or Crack? 🧠
- P/E Ratio: 47.3x – 🚨 rich af.
- P/B Ratio: 16.9x – 🧨 explosive.
- Fair Value Range: ₹45–₹55
🧮 Assuming FY26E EPS of ₹1.65 and assigning 30x–33x P/E (peer median is 28–35x), we get ₹49.5–₹54.5 FV.
You’re paying upfront for a clean balance sheet, high ROE, and monopoly-level moat. But it’s definitely not cheap.
5. What’s Cooking – News, Triggers, Drama 🍿
- Bonus Issue (July 2025) – 1:2 ratio approved with 98.64% votes.
- New CFO – Mr. Gulshan appointed, ex-OEM finance guy. Could indicate aggressive capex or investor focus.
- Dividend updates – ₹0.35 declared. Dividend payout dipped to 26%, lowest in 5 years — retained earnings = growth plans?
🧨 Triggers:
- Wiring demand for EVs, premium cars, electronics rising.
- Sumitomo tech transfers could expand product basket.
- Increasing local sourcing by OEMs = domestic wiring boost.
6. Balance Sheet – How Much Debt, How Many Dreams? 💣
| Metric | FY21 | FY25 |
|---|---|---|
| Borrowings | ₹96 Cr | ₹269 Cr |
| Reserves | ₹0 | ₹1,256 Cr |
| Total Assets | ₹1,789 Cr | ₹3,729 Cr |
- Practically debt-free, and reserves ballooning post demerger.
- Capex funded internally, not via debt binge. Investor-friendly model.
7. Cash Flow – Sab Number Game Hai 💵
| FY | CFO (₹ Cr) | Capex (₹ Cr) | FCF (Approx) |
|---|---|---|---|
| FY23 | ₹224 | ₹194 | ₹30 Cr |
| FY24 | ₹791 | ₹208 | ₹583 Cr |
| FY25 | ₹365 | ₹60 | ₹305 Cr |
- Strong FCF generator.
- FY24 was a golden year, but FY25 OCF dipped. Capex reduced too. Maybe waiting for the next OEM boom cycle?
8. Ratios – Sexy or Stressy? 📊
| Ratio | FY23 | FY25 |
|---|---|---|
| ROCE | 44% | 43% |
| ROE | 44% | 36% |
| OPM | 11% | 11% |
| Cash Conv. Cycle | 64 days | 55 days |
- Efficiency improving.
- Despite margin compression, return ratios still hotter than a car engine stuck in Delhi traffic.
9. P&L Breakdown – Show Me the Money 💸
- Revenue up from ₹3,938 Cr (FY21) → ₹9,320 Cr (FY25)
- Expenses growing in line: ₹3,385 Cr → ₹8,323 Cr
- EBITDA steady ~₹1,000 Cr. Margins protected.
- Net Profit CAGR of 11%, helped by lower tax, low interest burden.
This is not a high-growth rocket — but a well-oiled machine.
10. Peer Comparison – Who Else in the Game? 🥊
| Company | P/E | ROE (%) | OPM (%) | Market Cap (₹ Cr) |
|---|---|---|---|---|
| Motherson Wiring | 47.3 | 35.9 | 10.7 | 28,648 |
| Uno Minda | 67.9 | 17.5 | 11.2 | 63,642 |
| Endurance Tech | 45.6 | 15.5 | 13.4 | 37,728 |
| Bosch | 52.4 | 15.6 | 12.8 | 105,540 |
- MSWIL leads in ROE/ROCE by a huge margin.
- But P/E is at par with better-diversified peers like Bosch, Uno Minda.
- So: premium is justified… but not unlimited.
11. Miscellaneous – Shareholding, Promoters 🧐
| Shareholder Type | Jun 2022 | Mar 2025 |
|---|---|---|
| Promoters | 61.73% | 61.72% |
| FIIs | 8.6% | 10.16% |
| DIIs | 20.8% | 16.21% |
| Public | 8.9% | 11.92% |
- Retail holding rising – almost 12% now. Popular with small investors.
- Institutional exits (DIIs down from 20.8% to 16.2%) could be valuation concern.
12. EduInvesting Verdict™ ⚖️
✅ ROE hotter than a dosa tawa
✅ Free cash flow consistent
✅ Monopoly market share in a boring-but-essential product
⚠️ Expensive AF – 47x earnings for a wires business?!
⚠️ Margins under slight pressure, dividend payout reduced
This stock is like a Mercedes wiring system — high-performance, but overpriced.
📉 FV Range: ₹45–₹55 (Based on 30–33x FY26E EPS of ₹1.65)
📌 Current Price: ₹64.8 = ✨ already priced for perfection
✍️ Written by Prashant | 📅 July 9, 2025
Tags: Motherson Sumi Wiring, Auto Ancillary, Sumitomo JV, ROE Stocks, EV Supply Chain, EduInvesting Recap
