Samvardhana Motherson International, an Indian multinational manufacturer of automotive components, is making a massive move to dominate the luxury automotive supply chain. Through its subsidiary, Motherson Global Investments BV, the group has entered into an agreement to acquire a 100% in Nexans Autoelectric, a specialised German wiring harness manufacturer.
According to Nomura, this acquisition is a strategic masterstroke that provides the company with immediate access to a “Tier-1” European customer base that has been notoriously difficult to penetrate. Motilal Oswal Financial Services has reiterated a BUY rating on the stock with a target price of Rs 129. Meanwhile, Nomura maintains its Buy stance with a target price of Rs 127, anticipating that the deal will be cash EPS-accretive from the very first year of integration.
Nomura on Samvardhana Motherson: A premium gateway to German luxury
Nomura’s analysis emphasises that this isn’t just a capacity expansion; it is an entry into the inner sanctum of German engineering. Nexans Autoelectric, a firm with a 60-year legacy, derives over 50% of its total earnings from just three titans: BMW, Mercedes-Benz, and the VW/Audi/Porsche group.
The brokerage notes that Nexans operates 22 production sites across 11 countries with a workforce of approximately 13,000 employees, including over 800 engineers. For SAMIL, which already leads the Indian wiring harness market, this acquisition acts as a bridge to the European Passenger Vehicle (PV) segment. Nomura points out that while Samvardhana Motherson International has traditionally been strong in heavy-duty and commercial wiring, Nexans brings a specialised portfolio in:
High-Voltage Powertrain Harnesses: Essential for the propulsion of hybrid and full-electric cars.
Body Harnesses: Complex systems involving over 1,500 wires per vehicle.
Specialty Components: Custom cabling for seats, doors, and axles.
Motilal Oswal on Samvardhana Motherson: The math behind the margin
Motilal Oswal looked closely at the companMotherson is buying, Nexans Autoelectric. In 2024, Nexans made about Rs 6,741 crore (EUR 749 million) in sales. That shows it is a large, established business. However, its profit level is not very high. Out of every Rs 100 it earns, the company keeps about Rs 6.40 as operating profit, which comes to roughly Rs 431 crore ( 47.9 million euros) for the year.
The good part, according to Motilal Oswal, is that Nexans is doing better than before. In 2023, it was keeping only Rs 5.30 out of every Rs 100, but in 2024, this improved to Rs 6.40. This tells analysts that the business is recovering and becoming more efficient.
Motilal Oswal believes Motherson is buying this company at a reasonable price. The deal values Nexans at around Rs 1,860 crore (207 million euros). Simply put, Motherson is paying about half of Nexans’ yearly sales to buy the entire business, which the brokerage considers attractive.
The report also says Motherson has a strong track record of improving the companies it buys, using its internal operating methods, often called the “Motherson Way.” Because of this, Motilal Oswal expects the combined business to grow steadily. It estimates Motherson’s total sales could rise to Rs 1,50,500 crore by 2028 from Rs 1,24,200 crore in 2026, while profits could almost double to about Rs 6,270 crore over the same period.
The scale of this “Indian Giant” is staggering. Based on Motilal Oswal Financial Services projections, Samvardhana Motherson is expected to see massive growth:
Sales Forecast: For the year FY27, the brokerage expects sales to reach Rs 1,36,000 crore up from Rs 1,24,200 crore in FY26.
Net Profit (PAT): The adjusted profit is expected to jump from Rs 3,690 crore in FY26 to Rs 5,210 crore by FY27, a growth of over 41%.
Customer Mix: Nexans is very balanced. While 81% of its business comes from passenger cars, 19% comes from commercial vehicles (trucks and vans), giving Motherson a safety net across different types of vehicles.
Strategic synergies and future roadblock clearances
Both brokerages, Nomura and Motilal Oswalm in a concerted voice say that the deal is expected to be completed in the first quarter of FY27, which fixes an important gap in Motherson’s business. Nomura explains that Nexans earns its money from a healthy mix of vehicles. About 81% comes from passenger cars, while 19% comes from trucks and other commercial vehicles, which reduces dependence on any one segment.
Nomura also points out that Nexans has a strong presence in North America (28%) and Europe and the Middle East (54%). This helps balance Motherson’s existing business and spreads its exposure across multiple regions instead of relying too heavily on one market.
Motilal Oswal explains why the wiring harness business is especially valuable. Once a supplier’s wiring system is designed into a car model, such as a Porsche 911 or a Mercedes S-Class, it is almost never changed. The wiring is extremely complex and deeply built into the vehicle. Because of this, the supplier usually continues to earn revenue for as long as that model is produced, giving Motherson a steady and predictable income from these premium cars.
The ’Buy’case
The consensus across Nomura and Motilal Oswal is built on three pillars:
De-risking through Diversification: Reduced reliance on any single market or low-margin segment.
EV Readiness: Nexans’ expertise in high-voltage systems prepares Samvardhana Motherson for the global transition to electrification.
Accretive Growth: The deal is priced to add value to shareholders almost immediately without over-leveraging the balance sheet.
