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motherson wiring india share price: Motherson Wiring India’s growth story is intact: Vivek Chaand Sehgal

“We should be back to normal for this quarter also but it takes some time to explain and do it. As we said in the press release, it is a work in progress because things happened suddenly and we follow the mercantile system. If you look at the half year numbers, you will understand what we mean,” says
Vivek Chaand Sehgal, Chairman, Motherson Wiring India


In the second quarter, Motherson Wiring India’s EBITDA clearly was impacted because of costs such as your initial one-time start-up cost of new programmes at Bangalore and the new facility at Chennai. Will the margins be under pressure in the coming quarters too?
On the contrary, the whole growth story is intact. I do not think we would be impacted because of this. In the last quarter, it happened quite suddenly and the whole effect is also because of certain price increases given to labourers, workers and the associates of Motherson, which was as per law.

It will take us quarter or quarter-and-a-half to get them corrected. We should be back to normal for this quarter also but it takes some time to explain and do it. As we said in the press release, it is a work in progress because things happened suddenly and we follow the mercantile system. If you look at the half year numbers, you will understand what we mean.

Also wanted to understand the ongoing discussions that you are having with customers for one-time compensation as well as alignment to new cost structure to try and mitigate the current and future impact. What kind of recoveries and revenue potential can one expect?

It is a one-time thing. Definitely for the last quarter it will be there but also the pricing will be corrected for the future. So it has a double impact – one, for this quarter hopefully the compensation should come in and also the prices will be corrected for the future. So it is double gains for Motherson.

Will the ongoing discussion with customers for one time compensation as well as alignment to new cost structure mitigate the current and the future impact? What kind of recoveries and revenue potential can we expect?

No slowdown at all. We are seeing some pretty good demand from our customers and if they can make one more car, they are almost welcome. So, that is very good news. There is a huge pent up demand or demand for bookings and for different reasons different customers have had issues in supplying the demand. I think the demand will stay very well.


It currently forms a very small part of your revenue. Do you expect it to grow? Going forward, what will be the focus on the domestic segment?


Our focus is only on the India demand. There is no export portion of this business here. The export business is on the SAMIL side. We will talk about it later when we discuss SAMIL results.

With the focus shifting towards EVs, how do you see the content per vehicle rise going forward?
Definitely the content will go up. There is no doubt on that . go up because there is a huge growth in the power segment of wiring harnesses.

What about your capex plans for the fiscal?

Capex is very normal. We have done two new plants in this quarter and so that is almost done. The capex will only be maintenance capex but most probably around Rs 600-700 crore or so.

April to May 2022 were weak months for car markers due to semiconductor shortage. Has the supply issue been sorted out?

This is a question we ask the car markers but from our side, if the demand is high, it appears they have almost solved the problem. By and large it appears to be behind us.


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