CLSA has reiterated its outperform rating on Samvardhana Motherson International (SAMIL), raising its target price to ₹124, after management set ambitious goals of quintupling revenues over the next five years while retaining its long-term return on capital employed (ROCE) target of 40%.
The brokerage said that despite a stagnant global auto market, SAMIL has managed to more than double its bottom line and is now looking to non-auto segments as major drivers of future growth. Key focus areas include aerospace, electronic systems, car assembly, logistics, semiconductors, renewables, and medical equipment.
CLSA added that SAMIL has historically prioritised capital efficiency and will continue to do so, with no compromise on ROCE for either organic or inorganic growth. The company is also expected to maintain its focus on prudent capital structure and diversification. The brokerage said these attributes make SAMIL an attractive play on global supply chain evolution, despite broader macro challenges.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
