Samvardhana Motherson, Sona BLW shares slip as Trump's tariffs come into force

Forging stocks under pressure

Shares of auto forgings manufacturer Samvardhana Motherson and Sona BLW, slipped over 2 percent on March 4 after the Trump's 25 percent tariffs on Canada and Mexico came into effect from today. This not just squashed hopes of any reconciliation between the trade partners, but also alarmed bad news for the two Indian forgings companies, which have sizeable dependence o Mexico.

India's auto component exports to Mexico account for 3 percent of the total $21.2 billion in exports, amounting to around $656 million, according to a note from Elara Securities last month. The brokerage highlighted that industry interactions suggest these exports primarily consist of metallurgical components such as forgings and castings.

For Samvardhana Motherson, Mexico contributes 4 percent of its overall revenue. Elara noted that the impact of tariffs will depend on how original equipment manufacturers (OEMs) adjust their production strategies to mitigate rising vehicle costs in the US.

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Similarly, Mexico makes up around 2 percent of Sona BLW's total revenue. While most of the value addition for its products takes place in India, Mexico serves primarily as an assembly hub. Elara's note indicated that if OEMs shift production to the US, Sona BLW could directly supply these facilities instead.

At 9.28 am, shares of Samvardhana Motherson were trading at Rs 177.99 while those of Sona BLW were at Rs 476 on the NSE.

Both the stocks have taken a strong beating in the past one month after Trump's tariff plan announcements. Sona BLW lost around 5 percent during the last one month while Samvardhana Motherson shed 14 percent of its value.