Muted outlook, margin pressures may dent Motherson Sumi's prospects

Weak global auto demand a major challenge

The Motherson Sumi stock is likely to remain under pressure on the back of a weak performance in India, margin pressures, and a muted near-term outlook. The stock has shed over 16 per cent since the start of the year, as supply chain disruption — on account of coronavirus — has added to slowdown concerns in the India market. 

The company reported a 5 per cent dip in domestic sales, given the fall in passenger vehicle production and weakness in copper prices. The lower volumes led to negative operating leverage, thereby denting operating profit margins. While margins at 15 per cent