Motherson Sumi continues to tank

Yesterday, Motherson Sumi tanked over 9% and today also, the counter is in the red. The stock is down almost 4% currently at Rs.252.30 with an intra day low of Rs.239.65.

And blame all this fall on Credit Suisse. The foreign research house put out a report voicing concern about its domestic business, saying that the company is surely showing signs of a slowdown in its domestic business.

The brokerage said that the company’s dominant role in Maruti is going down as Maruti itself is reducing its single vendor concentration, ensuring that none has more than 70% share; Motherson currently has 85% vendor share in Maruti.

Credit Suisse has also stated that more and more Japanse component makers are gaining a foothold in the sector with Yazaki and Furukawa also increasing their share of the pie. In fact Furukawa has set itself a target of getting a 30% vendor share from Maruti by 2017.

The company is also a major supplier to Volkwagen and given the current scandal it has come under, Motherson too could be impacted.