Motherson Sumi could see earnings downgrades over auto sector slowdown

Muted global and domestic auto environment to impact revenues and margins

Hemmed in by demand issues in the Indian and the global automotive markets, along with and higher start-up costs, Motherson Sumi reported a lower than expected March quarter performance. While revenue in the quarter was broadly in line with estimates, margins, especially in international operations, were affected as the company ramped up operations at new plants and recent acquisitions. 

The key worry for the Street, however, is the slowdown in the global automobile sector, especially the luxury car segment. 

The European auto sector has reported a 3 per cent decline in the March quarter, compared to low single-digit growth over the past