How has been the historical performance of Motherson Wiring?

Nov 24 2025 11:28 PM IST

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Motherson Wiring has shown consistent growth in net sales, reaching 9,271.58 Cr in March 2025, but profitability metrics declined, with profit after tax falling to 605.86 Cr. Total assets increased to 3,671.40 Cr, while cash flow from operating activities decreased significantly, resulting in a net cash outflow of 152.00 Cr.

Revenue and Profit Growth

Over the five-year period ending March 2025, Motherson Wiring’s net sales surged from ₹3,918.60 crores in March 2021 to ₹9,271.58 crores in March 2025, representing a compound annual growth rate (CAGR) of approximately 24%. This growth was supported by a consistent rise in other operating income, which increased from ₹19.12 crores to ₹48.70 crores during the same period. Consequently, total operating income rose from ₹3,937.72 crores to ₹9,320.28 crores, underscoring the company’s expanding business scale.

Profitability also improved notably. Operating profit before depreciation and interest (PBDIT) excluding other income climbed from ₹553.13 crores in March 2021 to ₹997.13 crores in March 2025. Including other income, operating profit reached ₹1,009.05 crores in the latest fiscal year. Profit after tax (PAT) grew from ₹396.23 crores to ₹605.86 crores, reflecting the company’s ability to convert higher revenues into bottom-line gains despite rising costs.

Cost Structure and Margins

The company’s raw material costs rose in line with revenue, increasing from ₹2,535.61 crores in March 2021 to ₹6,076.44 crores in March 2025. Employee costs also escalated significantly, reflecting workforce expansion and wage inflation, from ₹653.46 crores to ₹1,603.24 crores. Other expenses nearly tripled over the period, indicating increased operational activities.

Despite these rising costs, Motherson Wiring maintained respectable operating margins. The operating profit margin excluding other income moderated from 14.12% in March 2021 to 10.75% in March 2025, while the PAT margin declined from 10.11% to 6.53%. These margin contractions suggest pressure from cost inflation and competitive pricing but remain within a sustainable range for the sector.

Balance Sheet Strength and Asset Growth

Shareholders’ funds nearly doubled from ₹709.70 crores in March 2021 to ₹1,698.30 crores in March 2025, supported by accumulated reserves rising from a negative base to over ₹1,256 crores. The company’s total assets expanded substantially, reaching ₹3,671.40 crores in March 2025 from ₹1,763.50 crores four years earlier, reflecting investments in fixed assets and working capital.

Net block of fixed assets increased from ₹155.90 crores to ₹461.00 crores, indicating ongoing capital expenditure to support growth. Inventories and sundry debtors also rose in tandem with sales, reaching ₹1,282.40 crores and ₹1,243.70 crores respectively, signalling higher operational scale and receivables management.

Debt and Liquidity Position

Motherson Wiring’s total debt has been significantly reduced from ₹81.80 crores in March 2021 to just ₹9.50 crores in March 2025, reflecting a strong deleveraging trend. Long-term borrowings remain modest, and short-term borrowings were eliminated by the latest fiscal year. This improved capital structure enhances financial flexibility and reduces interest burden, which stood at ₹24.75 crores in March 2025.

Cash and bank balances showed volatility, peaking at ₹293.30 crores in March 2022 before settling at ₹237.50 crores in March 2025. Operating cash flow was positive but fluctuated, with ₹364 crores generated in the latest year compared to ₹791 crores in the previous year, impacted by working capital changes.

Summary and Outlook

Overall, Motherson Wiring’s historical performance reflects a company on a strong growth path, with revenues more than doubling in five years and profits rising steadily. The firm has managed to expand its asset base and strengthen its equity while reducing debt levels, which bodes well for future financial health. Although margins have compressed somewhat due to rising costs, the company’s ability to sustain profitability and generate positive cash flows remains encouraging.

Investors should note the company’s consistent expansion and improving balance sheet metrics, which provide a solid foundation for continued growth. However, margin pressures and working capital fluctuations warrant close monitoring as the business scales further.

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