InvestorQ : I am having some shares of Motherson bought at 10% above current prices. Do you suggest I hold on to the stock or get out of it?
indhumathi Sayani made post

I am having some shares of Motherson bought at 10% above current prices. Do you suggest I hold on to the stock or get out of it?

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shrinidhi Rajan answered.
11 months ago
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The good news about Motherson Sumi is that it continues to remain focused on new acquisitions even in these tough markets. The not-so-good news is that there is very little traction for the company in terms of pick-up in auto sales globally. Secondly, the company has seen its debt consistently going up in the last few years and that is not a great sign in a tough liquidity market. Motherson Sumi currently has net debt of Rs.7150 crore as of March 2020. The net debt had increased sharply from Rs.3200 crore in FY15 to Rs.8000 crore in FY19 largely due to acquisitions that had added enormous fixed costs in the company’s balance sheet. The business level challenge for Motherson Sumi is that 40% of revenues come from Europe and the UK, which have been the worst impacted by the Coronavirus and have been under sustained lockdown.

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