CLSA has maintained its outperform rating on Samvardhana Motherson International Ltd (SAMIL) with a target price of ₹130 per share after the company reported better-than-expected operating performance in Q2FY26.
EBITDA margin came in at 8.7%, up 52 bps sequentially and above the consensus estimate of 8.4%. Revenue grew around 8.5% YoY, aided by 6% organic growth and a positive forex impact of 2–2.5%.
CLSA noted that tariff-related headwinds had a US$10 million impact during the quarter, but SAMIL remains confident of mitigating this through pricing and operational levers in the coming quarters. Management indicated that revenue remained partially affected by U.S. tariffs, but visibility improves significantly for 2HFY26 with the recent trade agreement between the U.S. and EU, expected to ease pressure on key geographies.
The brokerage added that SAMIL plans to lower its leverage ratio from 1.1x to 0.9x, supported by improving profitability, disciplined working capital management, and strong free cash flow generation.
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