Samvardhana Motherson

Samvardhana Motherson Share Price: Analysts Remain Optimistic but Revise Target Prices — Should You Buy?

Following Samvardhana Motherson International Ltd's third-quarter earnings, analysts have adjusted their target prices for the stock but continue to express confidence in the company’s resilience despite the uncertain automotive market.

Several leading brokerages have weighed in on the stock. Nomura maintains a 'buy' rating but has reduced its target price from ₹209 to ₹155 per share, representing a potential upside of about 23.7% from the current price of ₹125.33 per share. Although the company’s third-quarter earnings were below expectations, Nomura believes acquisitions and consumer electronics growth will drive future expansion, though the auto sector may pose challenges in the short term.

JPMorgan has also given the stock an 'overweight' rating and lowered its target price to ₹160, down from ₹190. This target offers a potential upside of 27.6% from the last closing price. JPMorgan noted that while the company’s revenue growth remains strong and its organic business is resilient, the auto industry’s near-term outlook is weakened by a slowdown in global light vehicle production and delays in original equipment manufacturer (OEM) launches. The firm has revised its earnings per share (EPS) estimates for FY25-27E, reducing them by 9-11% due to these global uncertainties.

Motilal Oswal retains its 'buy' call with a target price of ₹160, highlighting the company’s resilience despite challenging macro conditions. They also noted that non-auto sectors are expected to drive growth in the near term, with the stock trading at an attractive multiple of 21.3 times its FY26E EPS and 18 times its FY27 EPS.

CLSA, maintaining an 'outperform' rating, has lowered its target price to ₹167 from ₹190, indicating a 33.24% upside potential. The brokerage acknowledged that the company’s EBITDA margin met expectations, and organic growth remains strong. Additionally, they pointed to significant debt reduction, now at 0.9x net debt-to-EBITDA, as a positive.

BofA Securities also has a 'buy' rating with a target price of ₹160. They noted that Samvardhana Motherson’s third-quarter profit was in line with estimates, with 8% revenue growth driven by its inorganic business. The brokerage highlighted the company’s improving margins and strong aerospace order book, anticipating a 25-30% revenue CAGR. They also noted a positive net debt reduction and a favorable position for mergers and acquisitions.

Jefferies, maintaining its 'buy' recommendation, has revised its target price to ₹165, signaling a 31.65% upside from Friday’s closing. The brokerage observed a 10% year-over-year increase in EBITDA, although it was 5% below estimates. They also pointed out an expansion in EBITDA margins in areas like wiring harnesses and polymers, despite a challenging global auto environment. With expanding exposure to non-auto sectors, such as electronics and aerospace, and strategic inorganic opportunities, Jefferies remains optimistic about the company’s prospects, although they’ve reduced their FY25 EPS estimate by 9%.

Samvardhana Motherson’s third-quarter financials were strong, with a 62% increase in net profit to ₹879 crore. Revenue grew 8% to ₹27,666 crore, while EBITDA increased 13% to ₹2,687.4 crore, boosting the margin to 9.7% from 9.2% in the previous year.

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