Buy Samvardhana Motherson; target of Rs 218: Motilal Oswal

Motilal Oswal's research report on Samvardhana Motherson

Samvardhana Motherson (MOTHERSO) reported a strong 65.5% YoY growth in earnings (in line with estimates) despite muted automotive production growth in 1Q. It reported an 18% annualized RoCE in 1Q and management expects the same would continue to improve in FY25, aided by synergy benefits of acquisitions. ur positive view on MOTHERSO remains intact based on the ramp up of new businesses in non-auto, execution of a strong order book for SMRPBV, and capacities in place for growth. We reiterate our BUY rating on the stock with a revised target price of INR218 (25x Jun’26E EPS).

Outlook

The stock trades at reasonable valuations of 28x/22x FY25E/FY26E consolidated EPS. Our positive view on MOTHERSO remains intact based on the ramp up of new businesses in non-auto, execution of a strong order book for SMRPBV, and capacities in place for growth. We reiterate our BUY rating with a revised TP of INR218 based on 25x Jun-26E EPS.