The company’s revenue from operations came in at Rs 31,409 crore, marking an increase of 14% from Rs 27,666 crore posted in the same quarter of the previous financial year. Improvement in PAT was supported by lower finance costs and higher contribution from JVs and associates. Revenue growth was led by the impact of the Atsumitec acquisition, organic growth, commodities and favourable FX, the company said.
EBITDA for the quarter under review came in at Rs 3,042 crore, higher by 9.5% from Rs 2,776 crore in the same quarter last year. Margins increased to 10% from 9.7%, SAMIL’s investor presentation showed. “Operational improvements supported by realisation of benefits of Transformative Measures in MPP division,” it added.
What should investors do?
Motilal Oswal has reiterated a Buy rating on Samvardhana Motherson with a revised target price of Rs 148, after raising its earnings estimates by 6% for FY26 and 1% for FY27 following a better-than-expected Q3 performance despite challenging global macro conditions. The brokerage highlighted management’s next five-year revenue aspiration of USD 108 billion and expects the company to continue outperforming global automobile sales, supported by premiumisation trends, the ongoing EV transition, a strong order backlog across auto and non-auto segments and successful integration of recent acquisitions.
While ongoing tariff issues could cause some near-term slowdown in key geographies, Motilal Oswal believes the company is relatively well positioned due to its proximity to customers and ability to realign supply chains. It added that potential industry consolidation could benefit larger players like Samvardhana Motherson over the long term and maintained its Buy stance based on a valuation of 24x December 27E EPS.
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Nomura has also maintained a Buy rating on Samvardhana Motherson and raised its target price to Rs 140 from Rs 127, citing expectations of a recovery in passenger vehicle demand along with ramp-up in greenfield plants, aerospace and consumer electronics businesses and the integration of two acquisitions. The brokerage expects these factors to support revenue growth of 21% and 11% in FY27 and FY28, respectively. It also highlighted that operating leverage and ongoing cost rationalisation initiatives are likely to sustain margin improvement going forward. Additionally, Nomura noted that any potential new acquisitions could act as a key upside trigger in the company’s journey towards achieving USD 108 billion in revenue by FY30 from USD 25.7 billion in FY25.
Offering a contrarian view, Citi has maintained a Sell rating on Samvardhana Motherson with a target price of Rs 95, despite a Q3 earnings beat driven by strong performance in the Wiring Harness and Modules businesses and improving margins. The brokerage cautioned that global demand risks remain elevated and flagged concerns around the profitability of emerging businesses and recent acquisitions. Citi said valuations have been rolled forward but sees limited upside potential from current levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
