Nomura has maintained its buy rating on Samvardhana Motherson International Ltd (SAMIL) with a target price of ₹125 per share, following the company’s announcement to acquire Nexans Auto’s wiring harness business. The brokerage said the acquisition marks a strategically important step for SAMIL, enabling entry into the global passenger vehicle wiring harness segment through what it described as an attractively valued transaction.
According to Nomura, the acquisition is expected to be cash EPS-accretive from the first year itself, with an estimated 2% earnings accretion in year one. The deal is believed to be valued at around 4.3x CY24 EV/EBITDA, which Nomura considers compelling given the scale, customer relationships and geographic diversification it brings to SAMIL’s portfolio. The brokerage added that the transaction strengthens SAMIL’s position in higher-value automotive components while expanding its exposure to global OEM platforms.
Nomura highlighted that the wiring harness business aligns well with SAMIL’s long-term strategy of deepening content per vehicle and broadening its global footprint. The firm also noted that SAMIL continues to trade at a reasonable valuation of around 18x FY28 earnings, which does not fully reflect the potential upside from inorganic growth opportunities and execution synergies.
Disclaimer: The views and recommendations above are those of Nomura. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
