Motherson Sumi Wiring India Ltd (NSE: MSUMI) Q4 2025 Earnings Call dated May. 09, 2025
Corporate Participants:
Unidentified Speaker
Anupam Mohindroo — Chairman
Analysts:
Raghu Nandan — Analyst
Siddhartha Bera — Analyst
Unidentified Participant
Vijay Pandey — Analyst
Vipul Agrawal — Analyst
Kapil Singh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the conference call of Mother Sun Sumi Wiring India Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr V.C. Segal. Thank you, and over to you, sir.
Vivek Chaand Sehgal — Chairman
Thanks. Good evening, ladies and gentlemen. Thank you for joining the results conference call of. I am pleased to announce the Board has approved the results for the quarter-and-quarter four as well as the full financial year 2025. The company continues to charge a strong trajectory of growth based on sustainable fundamentals. I’m happy to state the company has delivered its highest-ever revenues both on a quarterly and a full-year basis. We are setting up greenfield plants to support our customers and I would like to highlight MS be supplying to the top nine customers of the top-10 selling vehicles four-wheelers in India as of financial year ’25. With this, I conclude my opening remarks. I have with me,, and with me to answer your questions. Back to you. Thanks.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephones. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ragu Nandan from Nuvama Wealth Management. Please go-ahead.
Raghu Nandan
Thanks for the opportunity. It is heartening to see a 12% growth when industry growth is in mid-single digits. My questions relate to the greenfields. Firstly, for the greenfield Plant revenue of INR119 crore. Would it be completely EV related revenue or approximately what portion of revenue would be EV?
Unidentified Speaker
Go-ahead hello, sorry, out-of-the total revenue of the company, about 4% has come from the EV side. But these investments are in these new plants in the greenfield and it’s a mix of EV and IC engine vehicles which are being reduced by the POEV and in some of them are both combinations.
Raghu Nandan
Got it, sir. Thank you for that. On Gujarat greenfield plant, when is the production expected to commence? As there is a mention in the investor TPT which is a delay in launch, would the ramp-up happen in Q2 instead of Q1
Anupam Mohindroo
In this site in Gujarat there are two sort of projects and one project is going to happen in Q1 of FY ’26 and the other project is going to happen in Q2 of FY ’26. And if you see the presentation also, there is an EV and ice port models are there as well.
Raghu Nandan
Okay thanks for the clarification. I mean as sir for the greenfields, approximately what level of utilization would be the breakeven point would it be like 40%, 50% see,
Anupam Mohindroo
If you have seen our last quarter presentation also, the total sales from these three new greenfields is INR2,100 crores on an annualized basis. And once the volumes will pick-up, which we are expecting in H2 when these three plants, all volumes will picked-up. And at that time, this sales will get realized on the annual basis.
Raghu Nandan
So understood, sir. So fair to assume by end-of-the year, we would be closer to optimal utilization?
Anupam Mohindroo
Yeah, that’s right. So what we are saying about the greenfield towards H2, we should be able to utilize them to the — to optimum capacity. And that is why we have calculated the revenue on an annualized basis from these three green greenfield to that kind of 2,100 cred on an annualized basis.
Raghu Nandan
Thank you, my interest. I’ll fall-back to the queue.
Operator
Thank you. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. Thank you. The next question comes from the line of Sidhartha Beira from Nomura. Please go-ahead.
Siddhartha Bera
Yeah, hi, sir. Thanks for the opportunity. It’s good to see that the greenfield losses have kept on coming down every quarter in the past few quarters. Sir, first question again on this aspect only. So we have already started one greenfield and two are, A, about to come. So the losses mainly pertain to the two new greenfields or the first one which has started that also has some element of loss to cost of turnover utilization
Unidentified Speaker
So largely it will be on account of two new greenfields. But yes, there would be some bit of that the other greenfield also, which has started the production because the sales for the second customer had started in-between Q4. So that is still not at optimum utilization as far as capacity is concerned.
Siddhartha Bera
Okay, understood. And second question, sir, when you say that the EV revenue-share is 4%, does it include only the high voltage harnesses or this will have some low voltage harnesses also, which will be going-in this? Okay.
Anupam Mohindroo
This is purely about the EV, the electric handy.
Siddhartha Bera
The high voltage only when you say the EV.
Anupam Mohindroo
Yes.
Siddhartha Bera
Okay. Okay. Okay. Sir, lastly, on the gross margin side, I understand that the copper is usually a pass-through and even in the past, we have not sort of seen any meaningful impact on our gross margins because of the volatility. But this time the gross margins have sort of dipped the Q-o-Q and both on a Y-o-Y basis. So is it something to do with the mix which is impacting the gross margins or something else which we are missing?
Unidentified Participant
Yeah, sure. So it’s a combination of both. There is a combination of both. Obviously, product mix is one of the reason where that margin varies on different products that we have different barring harness. Also, as far as copper is concerned, even though there is a pass-through arrangement with the customer, there is a time lag. So there could be an impact on the margin for a particular quarter, but then we need to look at it for a larger period, maybe for a year or so, where the impact will get scared off?
Siddhartha Bera
Okay. Understood, sir. Thanks a lot. I’ll come back-in the queue.
Operator
Thank you. The next question comes from the line of Vijay Pande from Nuvama Wealth Management. Please go-ahead.
Vijay Pandey
Hi, sir. Thank you for taking my question. Sir, I just wanted to check, can you tell us about what is the capacity of the greenfield plant for the upcoming the Gujarat, Haryana and Kuna plant. Just wanted to for this length in the forecasting.
Vivek Chaand Sehgal
So look, it’s always difficult for us to talk about capacities and all that because our customers and don’t appreciate because we can’t really talk on that. But is such a product that we can always increase the capacity by boards, by better efficiency and all that. So not very extremely relevant for but, what would you say?
Unidentified Participant
Exactly, sir. So we definitely need the space and we can take the capacities on the machining side, but then suddenly capacity will be jump and that’s how we work it out
Vijay Pandey
Okay. So just if I try to frame it in another way, like how should we expect once all the three plants start running up, what level of sales can we expect like
Vivek Chaand Sehgal
Difficult for us to see that because it will depend upon the mix how much is electric, how much is ICE, how much is hybrid very difficult for us to to guide you on that, because at the end-of-the day, it’s a customer who’s can we help them if you can
Unidentified Participant
Exactly so the exact mix, what will get made and what will get sold is it’s a time question. What we had indicated in the last quarter was that if all the volumes come in which were based on the plans, then all the total volumes with the kind of mix which we had received from the customers would be about INR2,000 plus crores
Vijay Pandey
Okay. Okay. Okay, thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question thank you. Thank you. The next question comes from the line of Ragun Nandan from Nuvama Wealth Management. Please go-ahead.
Raghu Nandan
Thank you, sir, for the opportunity again. For FY ’26, what would be the broad capex planned, would it be again in the range of INR200 crores?
Vivek Chaand Sehgal
Capex is about INR200 crores also, isn’t it?, and
Unidentified Participant
Yes sir it is approximately in this line only
Raghu Nandan
Thank you and Anurag sir would with relation to the high voltage margin, how does it compare with the lower voltage harness margins? And by when do you think the profitability will match in terms of would you look at-scale of high voltage harness going up, localization improving. And would you say that might take two, three years before you start making similar profitability in both the products?
Anupam Mohindroo
I think first of all, it is, you know, it’s wrong To say that there will be — there will be no profitability into the high voltages harness also and it is going to happen only after two to three years only. Yes, there are different margins into the different businesses and all-the-time our — I can say the efforts are that we should look for the opportunity where we can do the lot of localization, whether it’s high voltage or low voltage, wherever it makes sense and try to keep discussing with the customer as well on these things and keep improving the margins wherever the possibility is there.
Unidentified Participant
And just add-on, Anurag, that in terms of localization already the high-voltage cables with the plant where we localize the high voltage cables as well as charging connectors and the company works with the customers for further localization?
Raghu Nandan
Yes. Thank you, sir. Thanks for highlighting that. Yeah, that answers. Just one question. In terms of the copper price increase, would it be fair to say that generally three to six months is the time for pass-through?
Vivek Chaand Sehgal
In the year is last quarter as early as we can today.
Raghu Nandan
That’s all from my side. Thank you very much.
Vivek Chaand Sehgal
Thank you.
Operator
A reminder to all participants, please press time one to ask a question. The next question comes from the line of Vipul Agrawal from HSBC Bank. Please go-ahead.
Vipul Agrawal
Yeah, hi. Thank you for taking my question. Sir, part of my question on localization has been answered. Just wanted to understand a couple of points over there. Like how — and in a language, like how does localization works in — why are harnessing business, like what parts can be localized in India and to what extent it is possible to localise at all and what are the margin, how the margin trajectory changes when localization improves?
Vivek Chaand Sehgal
Ohh, question very close to my heart. But can you take this question?
Anupam Mohindroo
Yes, sir seenda on the localization front, this is when anything you know, because we are design partner also as well as the development also. So whenever the customer is giving us the product and putting out the components like that, which are not localized, there is a — always a — we do a feasibility of that. Can we go for the localization? Initially, it started with the import parts only, but in the longer run, we try to localize that as soon as we see the volumes. And we have, you know we have Samil one-side where we have all the wire ranges which are localized. We are already 1,000 plus components we are manufacturing in India. So we are capable enough to handle any components of wiring harness can be localized very, very quickly if it makes sense. Whenever we are doing a localization, we obviously discuss with the customer also. And then we see how the — you know the benefit goes to either to us or to customer in which way that decides with the customer in close coordination.
Vipul Agrawal
And sir, how does it impact the margin trajectory like is it accretive for both the OEMs and you or it is just you have to pass-on the total benefit to the OEMs, how does it work-in the localization?
Vivek Chaand Sehgal
So it depends upon the customers that as much as possible, all the customers prefer that we have localization. So depending upon what the opportunity is, we share or we don’t share,
Vipul Agrawal
Understood. Okay, landing on that. Understood. Sir, second question is on copper pass-through, like it’s a pass-through, but again, historically if I see the data, despite steep increase in corporate prices, your margins remains resilient of maybe a few quarters here and there, but you normally catch-up. So like is it like hedging is there? How does it work at can you take this question?
Vivek Chaand Sehgal
Yes. We are not hedging the any copper by ourselves. Basically, if our customers are hedging it, we work together with them. We have to arrangements as we discussed earlier that whether it’s quarterly or half yearly, so it’s a pass-through item for us.
Vipul Agrawal
Sure. Thanks. Sir, one last question on industry trends, basically maybe this would be — so really how are you seeing industry moving towards hybrid? Like there’s a lot of discussions among OEMs that have — there’s a lot of discussion going on between EVs and hybrids. But again, I guess hybrid are still highly taxed. So any sense you are getting from the OEMs like they are more focusing on hybrids going-forward or they still stick to EVs? How do you — how are you seeing the trends in-between hybrids and EVs in India? Maybe you can take a view of three to five years.
Vivek Chaand Sehgal
So we can’t comment on which way the market that could be in a way taking bets. So does not do that. We in fact follow the customer. We are very, very fast on our — nimble on our seat. We react very quickly and that’s how we are the same. And secondly, we are not trying to make money on these variables. We make our money on our efficiency, our good speed and everything like that. So yeah these kind of things sometimes may give you money, sometimes will take money from you but we can operate the plant-based on the efficiencies of the plant, people don’t second-guess the customer that’s at least what I have always told my teams,
Anupam Mohindroo
But okay this is very right, sir. So we are supporting all the powertrains and for us it’s very difficult in you know which ones into how much. So we are working on all kinds of powertrains and we support the customers beat ice, beat, hybrid, TV, CNGs, multiple options the customers are all working on with different possibilities.
Vipul Agrawal
Understood, sir. Thanks a lot for all the answers.
Operator
And thank you. The next question comes from the line of from Nomura. Please go-ahead.
Siddhartha Bera
Thanks for the follow-up, sir. Just a short clarification. In a scenario that some of the new greenfields which we have sort of are expecting start of production in Q1 and Q2 in case they get delayed, what happens in that scenario? Is there some compensation which is there, which we get or we need to continue to sort of beer the startup costs for a few more quarters? So what happens in that scenario? If you can just help me understand
Anupam Mohindroo
So this is a very I mean private discussion with the customers and of course, if there are impacts then always gets discussed mutually
Vipul Agrawal
Okay sir. Thanks that will be thank you.
Operator
A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Ragu Nandan from Nuvama Wealth Management. Please go-ahead.
Raghu Nandan
Thank you, sir, for the follow-up opportunity. For the three new green phase about 7,000 to 7,500 employees were required as indicated in the last call. Have these employees already been taken into — have they already been hired, trying to understand whether employee cost just currently hovering at INR410 crores per quarter, whether there can be an increase to that in coming quarters.
Vivek Chaand Sehgal
It’s need dependent you know we
Anupam Mohindroo
All right, sir. See, this is — as you have seen that one plant has already ramped-up. So that manpower Is fully there. The other two plants is falling on-Q1 and Q2 and the sum of the trials has already been started because in the phase when you SOP gets the mass production ramps-up. So partially, yes, that manpower has been higher, but in case of any changes happen, we always believe to breathe with the market and try to adjust our actions accordingly.
Unidentified Participant
And just to add to what mentioned, as the volumes will ramp-up after the SOPs because many more volumes will come up, people will get added
Raghu Nandan
Got it, sir. So it will be in a staggered modular manner based on the scale and utilization ramp-up.
Anupam Mohindroo
Yes.
Raghu Nandan
Thank you, sir. Thank you very much.
Operator
Thank you. Thank you. A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Kapil Singh from Nomura. Please go-ahead.
Kapil Singh
Yeah, good evening, sir. Just one question I have. We are seeing some supply constraints for where materials because of the China Chinese government getting some restrictions on that. So are you facing or likely to face any kind of supply constraints on account of that? And also for the connector, if you could tell us what percentage of the connectors are localized?
Vivek Chaand Sehgal
Couples they produce lot of different harnesses and all that. Are you talking of any particular harness or just as mainly for electric vehicles and hybrid vehicles because it seems there is a higher content of rare arts over there, but raw-material. We don’t make connectors out of and all that battery. We don’t do battery yet
Kapil Singh
Okay. So there is no supply disruption on account of that
Vivek Chaand Sehgal
Not yet right and imagine, but I I’ll open it to
Unidentified Speaker
Yeah, as you rightly said, sir, there is no such disruption on anything
Operator
Okay participants you may press star and one to ask a question thank you. Participants please press star and one to ask a question. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr V.C. Sagal for the closing remarks.
Vivek Chaand Sehgal
Thank you very much. Thank you all for your questions. I hope you could answer them. I think under tough circumstances the results have been very, very encouraging and the Board accepted that and congratulated all the people in the company. This the transaction in future of what kind of car is going to be important or not important or is it going to sell or not going to sell is there. But I think generally, we are seeing that we are in a position to support the customer exactly where he wants us to. And that allows us to actually increase our share. So we will continue to do that and wish you all a very happy and safe weekend and all the best.. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Suni Wiring India Limited, that concludes this conference. You may now disconnect your lines. Thank you