SAMIL seeks to soothe investors as Trump tariff worries weigh on auto stocks

SAMIL shares have cracked 16 percent since the start of the year.

Samvardhana Motherson International Ltd (SAMIL) has sought to reassure investors after its shares slid on concerns over former U.S. President Donald Trump’s proposed 25 percent tariff on foreign car imports.

The auto component giant emphasized that a substantial portion of its U.S. operations are either locally manufactured or qualify under the US-Mexico-Canada Agreement (USMCA), minimizing its exposure to the potential tariff impact.

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SAMIL’s stock dropped 2.22 percent to Rs 132 on March 27, in tandem with a broader selloff in auto and auto component stocks. Tata Motors and Sona BLW Precision Forgings saw sharper declines of up to 7 percent, as investors fretted over supply chain disruptions and cost escalations for export-dependent manufacturers.

In a regulatory filing, SAMIL stated that it does not foresee a “material impact” from the proposed tariffs, citing its extensive manufacturing footprint in the U.S. and Europe. Unlike component makers that rely heavily on exports, Motherson has built local capacities that provide a cushion against import levies.

Despite the market turbulence, CLSA maintained an ‘outperform’ rating on SAMIL, setting a price target of Rs 167—implying a 23 percent upside. The brokerage expects the company’s revenue to grow at an 11 percent CAGR between FY25-27, reaching $16 billion by FY27, with EBITDA margins at 9.5 percent.

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“Companies with significant U.S. exposure could face margin pressures. Tariffs will drive up costs, and if firms cannot pass them on, they may have to cut operational expenses or explore alternative revenue streams,” said Shridhar Kallani, Research Auto Analyst at Axis Securities, in a conversation with Moneycontrol.

The industry faces a pivotal moment with tariff collections set to begin on April 3. Automakers and suppliers will likely decide whether to absorb higher costs, pass them on to customers, or ramp up local manufacturing to navigate this.

On Friday, shares of the company closed at Rs 131, lower by 0.72 percent from the last close on the NSE. SAMIL shares have cracked 16 percent since the start of the year.

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