Samvardhana Motherson International Ltd Share Price – NSE /  BSE

Auto Ancillaries, Mid Cap

The brokerage has set a target price of Rs 170. The downgrade follows SAMIL's acquisition of a 95% stake in Japan's Atsumitec. The remaining 5% voting rights stake will continue to be owned by Honda Motor. Currently Honda Motor owns 48.01% in Atsumitec while the founders and other shareholders hold the rest.

Equity value for 100% stake in Atsumitec is 8.5 billion yen or $57 million, said the company in an exchange notification. The $412 million turnover Atsumitec makes high precision machined components including gear shifters, chassis and transmission parts for four and two- wheelers and has nine plants in Japan, China, United States, Mexico, Thailand, Indonesia and Vietnam.

The broker notes that this acquisition expands SAMIL's product portfolio to include chassis components like gear shifters and powertrain parts such as pulleys, connecting rods, and stator shafts. Additionally, it extends SAMIL's geographic reach to Vietnam, providing access to global metal and machining capabilities. The company anticipates increased penetration with Japanese OEMs on a global scale.

However, the brokerage has adjusted its FY2026-27 EPS estimates for SAMIL downward by 4-7% due to lower margin expectations, reflecting a general trend of declining margin outlooks among global OEMs. While the Atsumitec acquisition was completed at attractive valuations, its estimated EPS accretion is relatively modest at 1-2% based on FY2024 PAT. Given the ongoing weakness in the global automotive market, near-term growth and margins for SAMIL are expected to remain under pressure. The broker believes that the company's current valuations appear fair, considering these factors.

SAMIL is one of the world’s leading specialised automotive component manufacturing companies for OEMs. It is currently the largest auto ancillary in India and is ranked among the top 15 automotive suppliers worldwide.

On a consolidated bsis, net profit of SAMIL surged 336.49% to Rs 879.74 crore while net sales rose 18.78% to Rs 27668.35 crore in Q2 September 2024 over Q2 September 2023.

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The Board of Directors of Samvardhana Motherson International (SAMIL) at its meeting held on 06 December 2024, inter-alia, approved the acquisition of 95% shares with voting rights in Japanese company Atsumitec Co. through its wholly owned subsidiary of Samvardhana Motherson Automotive Systems Group B.V (SMRP B.V.).

Honda Motor shall continue to own remaining 5% voting rights shares in Atsumitec Co.

Atsumitec Co. is  engaged in the production of high precision machined components including gear shifters, chassis and transmission parts for 4- Wheeler and 2-Wheeler vehicles.

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Samvardhana Motherson International Ltd is down for a fifth straight session today. The stock is quoting at Rs 159.37, down 4.02% on the day as on 12:59 IST on the NSE. The benchmark NIFTY is down around 0.94% on the day, quoting at 23659.1. The Sensex is at 78018.99, down 0.83%.Samvardhana Motherson International Ltd has lost around 25.61% in last one month.Meanwhile, Nifty Auto index of which Samvardhana Motherson International Ltd is a constituent, has eased around 14.07% in last one month and is currently quoting at 23269.1, down 2.27% on the day. The volume in the stock stood at 312.71 lakh shares today, compared to the daily average of 132.96 lakh shares in last one month.

The benchmark November futures contract for the stock is quoting at Rs 159.73, down 4.16% on the day. Samvardhana Motherson International Ltd jumped 75.81% in last one year as compared to a 20.25% rally in NIFTY and a 36.59% spurt in the Nifty Auto index.

The PE of the stock is 125.91 based on TTM earnings ending June 24.

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Net profit of Samvardhana Motherson International rose 336.49% to Rs 879.74 crore in the quarter ended September 2024 as against Rs 201.55 crore during the previous quarter ended September 2023. Sales rose 18.78% to Rs 27668.35 crore in the quarter ended September 2024 as against Rs 23294.33 crore during the previous quarter ended September 2023.

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