Synopsis: Samvardhana Motherson posted strong Q4FY26 growth with higher margins, improving global demand, rising non-auto order book, lower debt and aggressive expansion plans across consumer electronics and aerospace businesses.
The shares of this large cap company majorly engaged in manufacturing and selling of components to automotive original equipment manufacturers, were in focus after the broker sees upto 22 percent upside potential.
With the market capitalization of Rs. 1,45,651 Crores, the shares of Samvardhana Motherson International Ltd were trading at around its 52-week high of Rs. 139 per share and is trading at a P/E of 35.2 whereas industry P/E stands at 27.4
Brokerage View:
ICICI Securities increased its FY27 and FY28 EBITDA estimates by 8–9 percent and maintained a “Buy” rating on the stock with an upside potential of 22 percent from its current price of Rs. 139 per share. The brokerage raised its target price to Rs 170 from Rs 145, citing improving contribution from high-margin non-auto businesses and better growth visibility.
Strong Q4 Performance Beats Expectations
Samvardhana Motherson International delivered a strong Q4FY26 performance, with consolidated revenue rising 17 percent YoY to Rs 34,309 crore, ahead of estimates. EBITDA grew 43 percent YoY to Rs 3,791 crore, while EBITDA margin improved by 200 basis points to 11 percent . Adjusted PAT jumped 61 percent YoY to Rs 1,691 crore. The company benefited from better operating leverage, improved business mix and favourable forex movement.
Non-Auto Businesses Becoming Key Growth Drivers
The company is rapidly scaling up its non-auto businesses, especially consumer electronics and aerospace. The consumer electronics business grew 7.5 times during FY26 on a smaller base, while aerospace revenue increased 40 percent YoY. The combined order book for these businesses stands near USD 3 billion. The aerospace order book alone expanded to nearly USD 1.6 billion from USD 1.2 billion earlier. Production in consumer electronics reached an annual run-rate of 14–16 million units during Q4FY26, while its largest facility is expected to start operations by Q3FY27.
Global Auto Demand and New Launches Supporting Outlook
The company expects improving global passenger vehicle and commercial vehicle demand to support future growth. Multiple new platform and model launches by European automobile companies during FY27 are expected to increase content growth and profitability. Management highlighted that its diversified product portfolio, strong customer relationships and powertrain-agnostic business model are helping it handle global uncertainty better than peers. Cross-selling opportunities and acquisitions also remain important growth levers
Segment-Wise Performance Remained Strong
The emerging business segment, which includes consumer electronics and aerospace, reported 59.5 percent YoY revenue growth and 91.4 percent YoY EBITDA growth, with margins improving to 14.5 percent . Integrated assemblies business saw margins rise sharply by 500 basis points to 15.6 percent . Modules and polymer products segment recorded EBITDA growth of 54.2 percent YoY, while wiring harness revenue increased 19.1 percent YoY
Margin Expansion and Future Investments
Sequential margin improvement was supported by richer product mix, operating leverage and cost optimisation. The company plans FY27 capex of around Rs 6,000 crore, with nearly 50 percent allocated for growth projects and 60 percent of that directed towards non-auto businesses. It is also developing four new greenfield plants, including facilities for wiring harness and logistics businesses. Meanwhile, consolidated net debt reduced from Rs 11,990 crore in December 2025 to Rs 9,810 crore in March 2026, improving net debt-to-EBITDA ratio to 0.8x from 1.1x.
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