Weak demand outlook a concern for Motherson, investors await demand uptick

Margins for the business, too, were down on account of weak operating leverage and the gradual ramp-up of plants

The Motherson Sumi stock has slumped close to 7 per cent in the last four trading sessions. This follows worries that weak demand in key markets, regulatory restrictions related to emissions, uncertainties such as Brexit, and higher investments will impact automakers, including Motherson Sumi. 

Given the near-term weakness in demand, plant utilisation and margins are being impacted. 
 

Analysts at Edelweiss Securities believe the commissioning of three new plants has coincided with the near-term demand weakness, thereby putting pressure on margins. 

For example, revenues for SMP were down 2.3 per cent on a comparable basis, due to emission norms-related issues. 

Margins for the business,