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Informist, Friday, Aug. 8, 2025

By Sunil Raghu

AHMEDABAD – Auto components manufacturer Samvardhana Motherson International Ltd. is expected to post a marginal on-year rise in its revenue for the June quarter, driven by benefits of integrating newly-acquired business and forex gains, analysts say. Another set of analysts say this rise may be offset by a slump in demand and a decline in US production volumes.

The company's consolidated net profit for the June quarter is seen at INR 10.1 billion, up 1.4% from the year-ago period, according to the average of the estimates of six brokerages. Kotak Institutional Equities has the lowest estimate for the bottom line at INR 9.56 billion and J.M.Financial Institutional Securities Pvt. Ltd. the highest at INR 10.5 billion.

Samvardhana Motherson, formerly Motherson Sumi Systems, manufactures automotive components such as wiring harnesses, mirrors, camera-based detection systems, polymer products, and lighting for vehicles. The company has presence in 44 countries and supplies components to popular brands such as Audi, Mercedes-Benz, BMW, and Ford.

For the large part of 2024-25 (Apr-Mar), the auto component company, directly or through subsidiaries, regularly bought stake in companies of its interest. It bought 11% stake in Nasdaq-listed REE Automotive Ltd for $15 million, 95% stake in Japan-based auto components maker Atsumitec Co. Ltd. for $57 million and Brazil-based Baldi Industria E Comercio Ltda. for a cash consideration of $7.8 million. Brokerages such as Motilal Oswal Financial Services, J.M.Financial Institutional Securities or Kotak, point out that integration of the earnings of these companies into the auto component maker would help improve Samvardhana Motherson's consolidated topline. They also expect currency gains to support revenue growth in the June quarter.

The company's top line for June quarter is seen at INR 311.5 billion, up 7.9% on year. Motilal Oswal Financial Services Ltd. has the lowest estimate of INR 305.9 billion and InCred Research Securities Pvt. Ltd. has the highest estimate for revenue at INR 317.4 billion. The analysts say though the revenue may rise marginally, it may also face a challenge of weaker demand. They also expect the company's margins to fall 50-70 basis points on year, led by slower ramp-up of new business and higher input costs.

The company's average earnings before interest, tax, depreciation, and amortisation estimates from five analyst reports is INR 28.1 billion, in a range of INR 27.4 billion to INR 28.6 billion.

Compared to the trailing quarter, analysts expect Samvardhana Motherson to report a relatively poor financial performance. While the bottom line is seen falling 4% from the March quarter, its top line is projected to rise about 6%. On the profitability front, the EBITDA is projected to rise 5%.

Samvardhana Motherson will announce its earnings for the June quarter on Aug. 13. 

According to analysts, the underlying industry outlook and commentary on the company's efforts to increase content per vehicle will be some of the key things to watch out for. The analysts will also look for commentary by Samvardhana Motherson's management on US President Donald Trump's proposed 50% tariffs on India. They will also want the auto component maker to provide the status of its proposed INR 60-billion capex and updates on nine of the 14 upcoming green field projects.

Of the dozen research reports on the company available with Informist, 10 have a 'buy' or equivalent rating on the stock with an average target price of INR 180 per share. Two of the 12 analysts polled gave a 'sell' on Samvardhana Motherson International's shares with a target price of INR 130 per share.

At 1439 IST, shares of Samvardhana Motherson traded 2.03% lower at INR 92.22 per share on the National Stock Exchange. At this price, the stock is up nearly 39.4% from its closing price of INR 152.09 on May 29, when the company had announced its March quarter earnings.

Following are the June quarter earnings estimates for Samvardhana Motherson International based on reports from six brokerage firms in descending order of the estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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