Samvardhana Motherson International Limited (SMIL) witnessed a nearly 3% decline in its stock price on Q3 results. As of 9:44 AM, the shares were trading 1.48% lower at Rs 124.34.
The company posted a robust 55.6% year-on-year (YoY) increase in net profit, reaching ₹984.35 crore, driven by steady revenue growth and improved operational efficiency. Revenue from operations rose 8.3% YoY to ₹27,665.92 crore. Profit before tax surged 55.4% to ₹1,321.67 crore, driven by operational efficiency and higher sales.
For the nine-month period of FY25, SMIL reported an 18.3% rise in total revenue to ₹84,787.06 crore, while net profit nearly doubled to ₹3,030.34 crore.
In the meantime, Nomura and JPMorgan cut target price after Q3 results. Nomura revised its target to ₹155 from ₹209, while JPMorgan cut its target to ₹160 from ₹190, citing near-term global auto market uncertainties.
Nomura pointed out that while acquisitions and the expansion of its consumer electronics segment will drive future growth, the auto segment remains a short-term challenge. In response to market conditions, Samvardhana Motherson has reduced its FY25 capex by ₹500 crore to ₹4,500 crore. Additionally, the company is progressing with 14 new plants, with six expected to become operational in the next two quarters.
JPMorgan acknowledged the company’s strong revenue growth despite sector-wide headwinds. However, it highlighted that vehicle production declined by 10% in Europe and 3% in North America, raising concerns over a potential slowdown in the global light vehicle market. The brokerage also noted delays in new model launches by OEMs, leading to an 8-11% cut in its FY25-27 EPS estimates.
Despite these near-term challenges, Samvardhana Motherson’s organic business remains resilient.
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