BOB Capital Markets has recommended 'Buy' on Motherson Sumi Systems (MSSL) with price target of Rs 586 with upside potential of 29%.

Commenting on the investment rationale, the stock broker said, "We expect MSSL to drive its consolidated earnings at 19% and 17% Compound Annual Growth rate (CAGR) over FY14-FY17 respectively.

Focus on increasing content per car with new products and synergies from the acquisitions has enabled MSSL to grow faster than industry. We initiate coverage on MSSL with a Buy rating and a price target of Rs 586 implying 29% upside.

We value the stock based on Sum of the Parts  (SOTP) methodology at FY18E EBITDA, standalone business at 14x, stock market report (SMR)/SMP 10x/9x, Stoneridge and other subsidiaries at 8x FY18E respectively.'' 

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