Samvardhana Motherson shares gain 2% on Q4 show; should you buy, sell, or hold?

Samvardhana Motherson shares have traded flat over the past year. ac

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26 Aug, 2025 12:21

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Auto ancillary player Samvardhana Motherson International Ltd (SAMIL) shares gained in trade on Friday, May 30, after the firm reported a 20 percent jump in net profit for the quarter ended March 31, 2025.

SAMIL reported a net profit of Rs 1,050.5 crore for the fourth quarter of the financial year 2025. This marks a nearly 20 percent jump from the Rs 878.63 crore net profit reported in the corresponding quarter of the previous financial year.

The company's revenue from operations meanwhile rose around 6 percent on-year to Rs 29,316.83 crore in Q4 FY25. It had earlier reported a revenue of Rs 27,665.92 crore for Q4 FY24.

The auto player's EBITDA came in around Rs 2,640 crore, which was lower by 10 percent YoY, falling under brokerages' estimates. The EBITDA margin slipped 70 basis points QoQ to nine percent.

Along with the Q4 results, the company announced that its board has recommended a bonus issue of 1 shares for every 2 shares held by a shareholder. "These bonus shares are subject to approval of shareholders in the ensuing General Meeting," the company said.

At 9.20 am, SAMIL shares were trading at Rs 155.1 apiece, up 1.9 percent compared to the previous close on the NSE.

Emkay Global said SAMIL's EBITDA performance was impacted by difficult macros and on-going expansion activities across divisions. "Underpinned by its innate engineering and manufacturing capabilities, SAMIL targets a major ramp-up in consumer electronics manufacturing, supported by strong vertical and backward integration initiatives (in mobile phone components, PCBA, silicon wafer components) over the next 5 years," it added.

The brokerage believes that with the worst-behind for core business, major foray into consumer electronics amid the bold vision for FY30 grants SAMIL a strong footing. It raised its target price to Rs 180 (from Rs 150 earlier) to reflect improving outlook, while maintaining its 'buy' call.

"Weak volume growth outlook and US tariff uncertainty remain growth headwinds for SAMIL. However, ramp-up in the consumer electronics and entry into newer segments, with potential acquisition opportunities can keep driving strong earnings growth and diversify its mix further," noted international brokerage Nomura Holdings.

The brokerage maintained its 'buy' rating, however, increasing its target price to Rs 170 per share, up from Rs 155 earlier. This implies an upside of 12 percent from current levels.

Jefferies reaffirmed its 'buy' rating on Samvardhana Motherson with a target price of Rs 180 per share. In Q4, the company’s EBITDA declined 10 percent year-on-year and came in 11 percent below Jefferies' estimates due to lower margins. Jefferies has cut its FY26–27 EPS estimates by 14–19 percent.