Motherson Sumi Wiring India Q1 FY27: Revenue Grows 37%, EV Contribution Rises to 8.5%; Copper and Wage Costs Pressure Margins

Motherson Sumi Wiring India Limited (NSE: MSUMI, BSE: 543498) delivered a resilient performance in the first quarter of FY27, with revenue growth supported by new customer programs, greenfield ramp-ups, higher content per vehicle and increasing contribution from electric vehicles.

However, profitability remained under pressure due to elevated copper prices and a sharp increase in manpower costs, particularly following minimum wage increases in the NCR region.

During its Q1 FY27 investor conference call held on August 4, 2026, the management said the company continues to work with customers to recover these additional costs while focusing on the ramp-up of its new facilities.

Q1 FY27 Revenue Growth of 37%

One of the key highlights of the quarter was the company’s 37% year-on-year revenue growth.

Management explained that the growth came from multiple factors rather than copper price inflation alone.

According to CFO Gulshan Pahuja, approximately 7% of the 37% growth was attributable to copper inflation, while the remaining growth came from volume growth, increased content, premiumization and the company’s participation in new model launches by OEMs.

This is an important distinction because it indicates that a substantial part of the company’s growth was operational rather than simply the result of higher raw material prices.

EV Contribution Reaches 8.5%

Electric vehicles continue to become an increasingly important part of MSWIL’s business.

The company reported that EV-related revenue accounted for 8.5% of total revenue in Q1 FY27.

Management clarified that this figure represents the company’s overall business supplied to EV vehicles and does not represent only high-voltage wiring harnesses.

The company also reiterated that it remains engine-agnostic, supplying wiring solutions to both traditional internal combustion engine (ICE) vehicles and EV platforms.

Management believes this provides flexibility as the automotive industry transitions toward different powertrain technologies.

Greenfield Plants Reach Break-Even

The company’s greenfield facilities were another major topic during the earnings call.

Management said the greenfield plants had already reached their break-even level in the previous quarter and maintained a revenue run rate of approximately ₹450 crore during the latest quarter.

However, the management clarified that the greenfield facilities have not yet started making a meaningful contribution to overall EBITDA.

Some plants are still in the ramp-up phase, and management expects them to begin contributing more significantly over the next one to two quarters.

The company is therefore looking at the greenfield operations as a medium-term growth opportunity rather than judging them solely on their current plant-level profitability.

Copper Cost Remains a Margin Headwind

Copper prices continue to be a key issue for MSWIL because wiring harness manufacturing is highly dependent on copper.

The company generally operates with a 3-to-6-month lag in passing copper price changes through to customers.

Management said that the company would like to reduce this lag, potentially moving toward shorter periods such as monthly or even 15-day adjustments, but negotiations with customers are still ongoing.

The company indicated that the situation is different across customers, with some operating on quarterly adjustments and others having longer lags.

Management said the current quarter still reflected a copper price increase of around 7%, creating a temporary impact on profitability.

For comparison, management noted that the corresponding impact in the previous quarter had been around 17%.

Minimum Wage Increase Adds Further Pressure

Apart from copper prices, the company faced another major cost challenge from higher employee expenses.

Management highlighted a significant increase in minimum wages in the NCR region, with wage increases of approximately 30% to 40%.

This increase was not anticipated at the beginning of FY27 and has been fully reflected in the current quarter’s results.

Employee costs were around ₹600 crore during the quarter, and management indicated that the quarter-on-quarter increase was largely attributable to the minimum wage increases.

The company is currently engaged in discussions with customers to recover these additional costs.

Management emphasized that the company has long-term relationships with its customers and expects the unusual increase in manpower costs to be considered as part of the ongoing commercial discussions.

However, the company did not provide a specific timeline or percentage for the expected recovery.

Customer Cost Recovery Remains a Key Monitorable

For investors, one of the most important issues going forward will be the extent and timing of cost recovery.

MSWIL’s business involves supplying highly manpower-intensive wiring harnesses to automotive customers. Management believes that unusual regulatory-driven cost increases need to be addressed to maintain sustainable operations.

The company is therefore working with customers on:

• Copper price pass-through
• Minimum wage increases
• Other component cost increases
• Reduction in the pass-through lag
• Better localization
• Productivity improvement

Management’s immediate objective is to bring unrecovered costs back to normalized levels.

New Vehicle Architectures: Management Sees Content Growth

The shift toward new vehicle architectures, including zonal and 48V architectures, was another important topic during the call.

There has been investor concern that new architectures could eventually simplify vehicle wiring and reduce the content per vehicle.

Management, however, said it has not yet seen meaningful de-contenting in the Indian market.

Instead, the company is seeing increasing vehicle complexity and more features being added to vehicles.

New architectures can also require more data cables, video cables and other specialized wiring solutions.

MSWIL said it is already involved in supplying and assembling such higher-value cables.

The management also pointed out that automakers continue to develop new vehicles on existing platforms because completely new architectures can be expensive to develop.

Therefore, while wiring harness simplification remains a potential long-term industry development, the company currently continues to see increasing content per vehicle.

Capacity Utilization Could Drive Future Expansion

Management indicated that it is closely monitoring overall capacity utilization.

The company has previously indicated that once utilization reaches approximately 80%, it would consider additional expansion.

Based on industry forecasts and customer plans, management suggested that new expansion announcements could emerge in the coming quarters.

The company is also evaluating further facilities depending on customer requirements and future vehicle programs.

Pune Greenfield Facility and Future Expansion

Investors also asked about the utilization of the Pune greenfield facility and whether MSWIL plans to establish additional large plants.

Management did not provide specific plant-level utilization numbers but said that capacity utilization is being assessed at the overall company level.

The company is currently studying customer forecasts and plans before committing to additional expansion.

This suggests that future capex will remain closely linked to customer programs and expected demand.

Capex to Be Funded Through Internal Accruals

Another positive point from the investor call was the company’s approach toward capital expenditure.

Management said that the capex budgeted for the current financial year will be funded through internal accruals.

This indicates that the company does not currently expect to rely on additional debt for its planned capex.

The company also reiterated that its long-term focus remains on return on capital employed rather than simply maximizing margins.

Management stated that the company’s objective is to maintain ROCE above 40%.

Greenfield Plants Expected to Eventually Reach Normalized Margins

The management expects the greenfield plants to gradually become part of the company’s regular operating base as they mature.

Currently, their contribution to margins remains limited because several facilities are still ramping up.

However, once utilization increases and operations stabilize, management expects these facilities to deliver margins comparable to the company’s established operations.

The key factor will be reaching sufficient scale and productivity.

What Investors Should Watch in the Coming Quarters

The Q1 FY27 call highlighted several important factors that could determine MSWIL’s earnings trajectory.

1. Copper Price Pass-Through

The company continues to operate with a 3-to-6-month lag for some customers. Faster recovery would reduce the temporary pressure on margins.

2. Minimum Wage Cost Recovery

The sharp increase in NCR wages has already affected Q1 profitability. The outcome of customer negotiations will be important for future margins.

3. Greenfield Ramp-Up

The greenfield facilities have reached break-even at the operating level, but their EBITDA contribution is yet to become meaningful. The next one or two quarters could provide greater visibility.

4. EV Growth

EVs contributed 8.5% of Q1 revenue. Continued EV adoption could provide additional opportunities for the company’s wiring harness business.

5. Content Per Vehicle

Increasing vehicle electronics and features are currently supporting higher wiring content per vehicle. This remains an important structural growth driver.

6. Capacity Expansion

If overall utilization approaches 80%, the company could announce additional capacity expansion based on customer requirements.

7. ROCE

Management continues to emphasize ROCE rather than margins alone, with a stated long-term objective of maintaining ROCE above 40%.

Management’s Outlook

MSWIL’s management described Q1 FY27 as a “work in progress” quarter, with several temporary cost pressures affecting profitability.

At the same time, management remains optimistic about the company’s underlying growth prospects.

The positive factors include strong industry growth, new model launches, successful greenfield ramp-up, increasing EV contribution and higher content per vehicle.

The company is also working to recover abnormal cost increases from customers and improve the efficiency of its new plants.

This article is based on the company’s Q1 FY27 investor conference call transcript. The comments regarding future growth, cost recovery, expansion, and profitability are management expectations and are subject to business, economic, regulatory, and market risks.