Acquisitions and expansion into electronics and aerospace are emerging as key drivers of Samvardhana Motherson's growth outlook. Brokerages expect the Yutaka and Nexans acquisitions to support revenue growth and synergies, while North American commercial vehicle recovery and new business segments could add to earnings over the coming years. However, concerns around global vehicle demand, Chinese competition and rising debt remain.
The brokerage views are divided. Jefferies retained Buy and raised its target price to Rs 200 from Rs 190, citing growth opportunities and expecting a 25% EPS CAGR through FY29. Goldman Sachs maintained Neutral but raised its target to Rs 176 from Rs 165. Citi retained Sell, despite increasing its target price to Rs 140 from Rs 115.
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Samvardhana Motherson International Ltd. reported a 42.1% year-on-year increase in consolidated net profit to Rs 1,175 crore in Q2FY27. Revenue rose 26.9% to Rs 38,280 crore, while Ebitda increased 28.6% to Rs 3,357 crore. The Ebitda margin improved marginally to 8.8% from 8.7%.
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Samvardhana Motherson Q2 highlights (Consolidated, YoY)
- Net profit up 42.1% to Rs 1,175 crore from Rs 827 crore.
- Revenue up 26.9% to Rs 38,280 crore from Rs 30,173 crore.
- Ebitda up 28.6% to Rs 3,357 crore from Rs 2,611 crore.
- Ebitda margin at 8.8% versus 8.7%.
Here's what brokerages are saying after Samvardhana Motherson announced Q2 results
Goldman Sachs
- Maintained 'Neutral'; target price raised to Rs 176 from Rs 165.
- Yutaka and Nexans acquisitions are expected to support revenue growth and synergies.
- Margins are expected to improve through pricing recovery and cost efficiencies.
- Consumer electronics Greenfield 3 ramp-up has shifted to Q4FY27–Q1FY28.
- Raised EPS estimates by up to 9%.
Jefferies
- Maintained 'Buy'; target price raised to Rs 200 from Rs 190.
- Electronics and aerospace expansion, acquisitions and a recovery in North American commercial vehicles are expected to drive growth.
- Expects a 25% EPS CAGR through FY29 and raised earnings estimates by 2–5%.
- Chinese original equipment manufacturer competition in Europe and rising debt remain key risks.
Citi
- Maintained 'Sell'; target price raised to Rs 140 from Rs 115.
- Yutaka and Nexans acquisitions are expected to support earnings growth.
- Consumer electronics expansion and aerospace diversification offer new growth avenues.
- Weak global vehicle demand, acquisition uncertainty and rising debt remain risks.
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