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Can New Acquisitions and Capex Drive Samvardhana Stock to New Highs?
Analysts from Emkay, ICICI Securities, and Motilal Oswal have reaffirmed their ‘BUY’ ratings for Samvardhana Motherson International, projecting a target price between ₹129-140. This optimistic outlook is rooted in several compelling growth catalysts:
– Premiumization Trends: Increased consumer demand for high-end automotive products.
– Electric Vehicle (EV) Transition: Shift towards EV manufacturing is expected to enhance revenue.
– Diversification into Non-Auto Verticals: Expansion into sectors like consumer electronics and aerospace.
Recent Stock Performance
– Shares of Samvardhana Motherson increased by 9% over the last month, reaching a 52-week high of ₹121.5 on December 12.
– The company anticipates rapid revenue growth, supported by new model launches and improvements in operational efficiency.
Strategic Capex Plans
For FY26, Samvardhana has earmarked over ₹6,000 crore for capital expenditures, having deployed ₹2,653 crore in the first half of the year. Noteworthy developments include:
– Operationalization of two new greenfield plants during the September quarter.
– An additional ten facilities are under construction, with most expected to become operational by FY27.
Order Book and Revenue Insights
– As of the end of September, the company’s order book stood at a substantial $87.2 billion, anticipated to yield results over the next five to six years. This includes $3 billion attributed to non-auto sectors.
– The electric vehicle segment represented 22% of the automotive order book, a slight decline from 24% in the previous quarter, indicating a temporary slowdown in EV growth.
Recent Acquisitions
Samvardhana Motherson recently announced three key acquisitions:
– Yutaka Giken (Japan): Enhances the partnership with Honda and introduces advanced motor rotor and stator assembly capabilities.
– Rubbertec (Australia): Expands their elastomer product range.
– Rider Dome (Singapore): Marks entry into advanced rider assistance systems for two-wheelers.
Financial Performance
During the September 2025 quarter:
– Revenue grew by 8.5% year-on-year to ₹30,173 crore.
– After excluding exceptional items, EBITDA increased by 10.4% to ₹2,719 crore.
– Net profit rose by 13.2% to ₹845.6 crore, with EBITDA margins improving to 9% from 8.9%.
Despite near-term tariff challenges in key markets, Samvardhana is well-positioned to navigate these issues due to its proximity to clients and supply chain adaptability. Analysts suggest that industry consolidation could further bolster the company’s standing in the market.
Conclusion: Future Prospects for Samvardhana Stock
With aggressive capex plans and strategic acquisitions, Samvardhana Motherson International is poised for significant growth. As the company expands its product lines and strengthens partnerships, its stock may very well reach new heights. The focus on premiumization and the growing non-auto sectors could serve as vital growth levers for the company. Investors are advised to watch closely as developments unfold, particularly in the context of upcoming operational expansions and market dynamics.