Motherson Group considers acquisitions as pandemic presents attractive opportunities
“We are in a good position to make acquisitions, even in a volatile environment. Our balance sheet has strengthened since OEMs began reopening their factories last October, and we may start to ramp up again,” said the President of MSSL, Vivek Chaand Sehgal. shareholders of the company in the 2020-2021 annual report.
He noted that the company’s criteria for bringing new businesses into Motherson have not changed due to the current situation.
“Acquisitions must create value for our customers and must allow us to simultaneously achieve our revenue and ROCE objectives, among others. In other words, we will not be making acquisitions just to achieve our primary goals, ”Sehgal said.
Thanks to unprecedented government stimulus packages around the world, the economic impact of the pandemic on vulnerable businesses appears to be less severe than it otherwise would have been, he noted.
“Nonetheless, many companies are looking for partners or acquirers, and we are actively looking for opportunities that best match our clients’ requirements. We continue to believe that the economic circumstances created by the pandemic may make the available opportunities more attractive in the times to come. This is especially true when government support programs are ultimately cut, ”Sehgal noted.
He added that despite the pandemic, the company’s organic growth has also remained robust.
“Our backlog around the world is strong and growing. Our operating cash flow is healthy and as of March 31, 2021, our net debt is the lowest in 17 quarters,” Sehgal said.
He noted that his stated goal – the Vision 2025 goal – of $ 36 billion in revenue with 40% ROCE (return on capital employed) – is ambitious.
“Getting there will require closer teamwork, intense sharing and a spirit of growth together. We are moving to new geographies, entering new markets, forging new partnerships and engaging new customers, and as a family we are stepping up to meet these new challenges together, ”said Sehgal.
In accordance with its five-year plan, MSSL has set itself the goal of achieving consolidated sales of $ 36 billion, of which 75% comes from the automotive sector and 25% from new divisions such as aerospace, logistics and the health and medical segments by fiscal year 25.
The Motherson Group has grown steadily over the past 28 years. Its sales have grown at a CAGR of 33% since 1993.
It went from $ 3 million in 1993 to $ 8.2 billion in 2021.