Goal: ₹160
CMP:₹124.95
Samvardhana Motherson Worldwide’s (SAMIL) worldwide natural enterprise may stay beneath stress within the close to time period. Nonetheless, the ramp-up of its acquired companies ought to drive the topline development. Margin enlargement, regardless of acquisitions, offers us consolation in its inorganic development technique. Moreover, we see the Client Electronics enterprise having a $3b in income potential.
SAMIL’s income missed ours and BBGe (Bloomberg estimates) on weak spot in Wiring Harness and Imaginative and prescient Methods. EBITDA margin expanded by c54bp y-y and beat BNPPEe and BBGe. EBITDA margin enlargement was led by gross margin enlargement which was offset by greater worker prices. PAT missed our estimates on greater finance prices and efficient tax charges.
Demand traits are weak, and diversification is a tailwind. New mannequin launch plans are delayed within the US and Europe; nonetheless, that is offset by development in China. Regardless of weak world demand traits, SAMIL’s income can develop helped by its diversification technique and ramp-up of its upcoming vegetation throughout companies, in our view. Margins of SAMIL’s varied acquisitions have additionally began increasing, driving greater EBITDA and PAT development.
We lower our FY26-27E EPS and goal multiples to issue within the slower demand surroundings. Our SOTP-based TP falls by 3 per cent. Preserve Outperform with revised TP of ₹160.
