Shares of Samvardhana Motherson International Ltd. rose by over 8% in early trade on February 4, 2025, hitting an intraday high of ₹141.55. The stock was trading at ₹139.39 as of 9:31 AM IST, reflecting a gain of 6.72% from its previous close of ₹130.61. The company’s market capitalization stood at ₹949.78 billion.
The surge in stock price comes as US President Donald Trump delayed the imposition of 25% tariffs on goods imported from Mexico and Canada, providing temporary relief to auto component exporters. The pause, scheduled for 30 days, follows negotiations between the US and its North American trading partners.
Impact on Samvardhana Motherson:
Mexico accounts for nearly 4% of Samvardhana Motherson’s overall revenue. The company exports a variety of auto components to Mexico, where they are assembled and shipped to major automakers such as General Motors, Toyota, and Volkswagen.
Monday’s session witnessed a sharp decline in the company’s shares due to initial concerns over the tariff announcement. However, the temporary pause has boosted investor confidence, with expectations that further negotiations may mitigate long-term impacts.
Tariff implications on operations:
The proposed tariffs were anticipated to increase supply chain costs, forcing automakers to reassess their sourcing strategies. Reports suggested that Original Equipment Manufacturers (OEMs) could shift production to avoid additional costs, potentially impacting Motherson’s assembly operations in Mexico.
With the current delay, the company gains time to strategize and explore options to manage tariff-driven risks while awaiting the outcome of trade discussions.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice.
