Samvardhana Motherson share price is down 2% intra-day today. This decline comes after several brokerages downgraded their target price for the automotive component giant. As the stock remains below its 52-week high of Rs 3,270.95, with a market capitalisation of Rs 3.37 lakh crore, let’s take a look at what is the brokerages say on Samvardhana Motherson stock:
Nuvama: Maintains Buy, target price reduced to Rs 166
According to the brokerage firm Nuvama, Samvardhana Motherson EBITDA in Q3FY25 earnings was in line with expectations. Although the company reported a slightly lower than expected revenue of Rs 27,670 crore, the company managed to keep its earnings in line due to better margins in its wiring harness and integrated assemblies segments.
As per the brokerage firm, the company’s revenue grew 8% YoY, majorly driven by its inorganic initiatives, which contributed Rs 22.4 billion. Furthermore, the brokerage is also optimistic about the company’s long term growth, with a projected 6% revenue CAGR for FY25-27. The report also noted the company’s management and efforts to increase its content per vehicle and tab into new markets though inorganic opportunities.
Although a muted outlook for North America and Europe for FY26E, the brokerage has revised its earnings estimates slightly downward, cutting FY25E–FY27E EPS by 4-7%. However, the firm is still constructive on SAMIL’s prospects, with a ‘BUY’ rating and a revised target price of Rs 166, down from Rs 194 previously.
“We are constructive on SAMIL’s prospects on the back of strong
management capability, inorganic initiatives, pending order book and increasing content; reiterate ‘BUY’, with an SotP TP of INR166 (earlier INR194), implying a blended PE of 23x (26x earlier),” added the brokerage in its report.
Motilal Oswal: Maintains Buy, target price reduced to Rs 160
As per the brokerage, the company’s Q3FY25 operational performance is in line with estimates. Furthermore, it has lowered its FY26E EPS by 15%, it has largely maintained its FY25E EPS, noting that the company’s long-term prospects remain intact.
The brokerage believes that the company’s Q3 performance highlights SAMIL’s business resilience. The brokerage has reiterated its ‘BUY’ rating, with a revised target price of Rs 160, based on a valuation of 24x Dec’26E EPS.
“We expect MOTHERSO to continue to outperform global automobile sales, fueled by rising premiumization and EV transition, a robust order backlog in autos and non-autos, and successful integration of recent acquisitions,” added the brokerage in its report.
JM Financial: Maintains Buy, target price at Rs 165
According to the brokerage house, the company reported a 50bps YoY improvement in EBITDA margin, reaching around 9.7%.
The firm further in its report added that SAMIL’s expansion into new sectors like consumer electronics and aerospace, combined with its strong performance in automotive, presents a multi-year growth opportunity.
“Inorganic revenue for 3QFY25 stood at INR c.22bn from subsidiaries acquired post 3QFY24. SAMIL has announced 2 new acquisitions (Atsumitec and Baldi Auto) during the quarter to enable further diversification and vertical integration in the business. Company expects Atsumitec acquisition to complete in 4QFY25 and revenue to begin 1QFY26 onwards,” added the brokerage in its report.
The brokerage expects a 13% revenue and 28% EPS CAGR over FY24-27E, with a BUY rating and a target price of Rs 165 by March 2026, based on a 24x FY27E EPS multiple.
Samvardhana Motherson Q3FY25 performance
In its Q3FY25 earnings, the company posted a net profit of Rs 879 crore,. Revenue from operations grew by 35.1% YoY, reaching Rs 3,387.6 crore.
The EBITDA for the quarter rose to Rs 2,776 crore, and operating expenses also saw an increase of nearly 7%, reaching Rs 26,559 crore. The company expanded its EBITDA margin to 9.7%, up from 9.2% in the same quarter of the previous year.
The company’s net profit margin also rose to 3.6% from 2.5% in the December quarter of the previous fiscal.