Goal: ₹160
CMP:₹124.95
Samvardhana Motherson Worldwide’s (SAMIL) worldwide natural enterprise may stay underneath strain within the close to time period. Nevertheless, the ramp-up of its acquired companies ought to drive the topline development. Margin growth, regardless of acquisitions, provides 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 point in Wiring Harness and Imaginative and prescient Programs. EBITDA margin expanded by c54bp y-y and beat BNPPEe and BBGe. EBITDA margin growth was led by gross margin growth which was offset by larger worker prices. PAT missed our estimates on larger 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 international demand traits, SAMIL’s income can develop helped by its diversification technique and ramp-up of its upcoming crops throughout companies, in our view. Margins of SAMIL’s varied acquisitions have additionally began increasing, driving larger EBITDA and PAT development.
We lower our FY26-27E EPS and goal multiples to issue within the slower demand atmosphere. Our SOTP-based TP falls by 3 per cent. Preserve Outperform with revised TP of ₹160.
