Samvardhana Motherson share price is like to go up. Samvardhana Motherson Automotive Systems Group BV has entered into an agreement to acquire 100% stake in SAS Autosystemtechnik GmbH (Germany) (“SAS”) from Faurecia. “SAS” is a leading global provider of assembly and logistics services for the automotive industry with a strong customer relationships with leading European and American OEMs. This acquisition will enhance Motherson’s integration in the global automotive supply chain and increase its customer proximity.
This acquisition will help Motherson Group to present itself as a leader in assembler of cockpits modules globally, with special focus on EV models. This will enhance the brand value of the company globally. Invest for long term.
Samvardhana Motherson share price – The company is a diversified global manufacturing specialist in the auto components sector that supplies automotive OEMs as well as customers in a range of other industries.
- Samvardhana Motherson International Ltd. has over 300 facilities – including manufacturing plants, module centers, assembly centers, units for service businesses, etc. across 41 countries. The company is the fastest-growing company in this segment.
- Samvardhana Motherson Automotive Systems Group BV (SMRPBV), through its Vision systems division, has agreed with Ichikoh Industries in Japan to buy a 100% stake in its mirror business at an Enterprise Value of JPY 5.2 Bn.
- Samvardhana Motherson International Ltd. has made 4 acquisitions in FY 2021-22.
- The company completed its reorganization in 2022 with the demerger of its entity Motherson Sumi Wiring India Limited (MSWIL), which is separately listed on stock exchanges.
- Mottherson Sumi and Samvardhana Motherson International Ltd. merged to become Samvardhana Motherson International Ltd.
- This reorganization of the company will bring more value to the stakeholders.
- Completed the acquisition of CIM Tools Private Limited for machining and sub-assembly of components for the aerospace industry.
- The group is ready for new opportunities such as new energy vehicles of electric vehicles and their infrastructure. The company’s parts or components well as innovative products and manufacturing solutions are well-positioned to cater.
Samvardhana Motherson International Ltd. financial snapshot
Samvardhana Motherson International Ltd. reported total revenue from operation of INR 62,831 crores in FY22 as against INR 59,755 Crores in FY21, a growth of ~5% during this period, as per the annual report FY22.
- In a vision for 2025, the company announced achieving a target of USD 36 billion in consolidated revenues in 2024-25 with 40% ROCE with well-diversified geographically.
- No country, customer, or component should contribute more than 10% to our revenues. The company is also planning to achieve 75% of its revenue from the automotive industry, and 25% from new divisions.
- It is also planning to distribute up to 40% of consolidated profit as dividends. This is one of the best companies among the top 5 listed Auto component manufacturers stocks. I would love to invest in the company in the long term.
- Samvardhana Motherson is a mid-cap company with a market cap of INR 51,602 crores as of March 31 FY22 with a face value of INR 1.
- The company has been reducing its debt over the years. The debt-to-equity ratio come down from 1 in 2019 to 0.62 in FY22.
Samvardhana Motherson International Ltd. products Segments and its revenue
Samvardhana Motherson International Ltd. operates in four segments such as wiring harnesses, Vision systems, Modules & Polymer Products, and Others. Here “Others” include other industries such as Aerospace, logistics, health & Medical, Services, lighting & electronics, precision metals & modules, Elastomers, and Technology & Industrial Solutions.
- The wiring harness and Modules & Polymer Products segments are the major contributors to the total revenue of the company.
- Modules & Polymer Products contributes 45.7% while the Wiring harness segment contributes 29.6% to the total revenue of the company in FY22.
- Motherson Sumi wiring share – itself a listed company in India. The company operates in the wiring harness segment. Motherson Sumi’s wiring share price is about to start its upward journey. This is one of the best companies in the wiring harness segment of the industry.
Mr. Vivek Chaand Sehgal is the promoter and Chairman of Samvardhana Motherson International Ltd. Mr. Laksh Vaaman Sehgal is one of the promoters and Vice Chairman at Samvardhana Motherson Group. Promoters have been increasing their holdings in the company over the years.
- Promoter holding in the company increased from 61.73% in June 2021 to 68.16% in June 2022. That reflects the promoter’s confidence in the company.
- During the same period, both FIIs and DIIs reduced their holding in the company.
- However, over the last two quarters – March and June quarter of 2022 – both FIIs and DIIs keep their holdings constant at 9.5% and 10.5% respectively.
- Promoters’ pledge shares also reduced from 3.69% of their total holdings in June 2021 to 1.12% in June 2022.
Samvardhana Motherson’s share price is trading at its lower-level bouncing from its strong base at 71 levels after the company announced a bonus of 1:3 to all its shareholders. Though the Samvardhana Motherson share price is trading up with strong volume for the last 5 trading days, the share will face strong resistance at the 80 levels. So, for the short-term investor, this may not be the right time to invest in the stock. However, for the long-term investor, this may be the right time to invest.
However, automobile industry is poised to grow due to government push for electric vehicles, and The PLI scheme for the automotive industry. The detailed analysis on Auto component Industry in India and best 3 stocks to invest is available here.