Samvardhana Motherson Q4 Results Review - Healthy Beat; Promising Growth Prospect In Non-Auto: Motilal Oswal

Motilal Oswal Report

Samvardhana Motherson International Ltd. reported robust performance in Q4 FY24 as Ebitda/profit after tax exceeded our estimates at Rs 26.7 billion/Rs 9.2 billion (estimate: Rs 24.9 billion/Rs 6.6 billion). Additionally, the management indicated that the P&L impact of the Yachio, Lumen, and ADI acquisitions will start reflecting in Q1 FY25.

These acquisitions are expected to contribute an additional Rs 144 billion in net revenues for FY25E.

We increase our FY25E/FY26E earnings per share by 2%/5% to account for:

1. significant growth potential in the coming years for its non-auto divisions, particularly aerospace and consumer electronics, and

2. improved margins.

Consequently, we have raised our target multiple for Motherson to 22 times (previously 20 times) and reiterate our Buy rating on the stock with a revised target price of Rs 170.

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