Samvardhana Motherson Share Price Hits Over Six–Month Low As Analysts See Growth Challenges
Samvardhana Motherson International share price fell 3.44% to Rs 160.33 apiece, the lowest level since June 10.
(Source: Company website)
Samvardhana Motherson International Ltd.'s share price fell to the lowest level in over six months on Wednesday as analysts said that there are challenges to the company's growth moving forward. The analysts expressed their views after Samvardhana Motherson International released its second quarter earnings.
Citi Research remained cautious for Samvardhana Motherson International as it does not expect new non–auto business segments to offset the decline in auto segment. Auto contributes most to the company's revenue.
Moreover, global demand trends, and key customers cutting the volume guidance also may pose challenges for Samvardhana Motherson International, Citi Research said.
Citi Research has a 'Sell' rating on the stock with a target price Rs 125, which implied a 23.8% downside from Tuesday's closing price.
Management said the net profit included one–time gain of Rs 133 crore, Citi Research said. It also said that July–-September is seasonally weak. They are optimistic about growth and margin expansion in the second half.
Emkay Global Research also said that Samvardhana Motherson's outlook is weakening and challenges remained across markets. The brokerage cut earning per share estimates to 10%, 5%, 3% for financial year 2025, 2026, and 2027, due to lower margins.
The brokerage has an 'Add' rating on the Samvardhana Motherson share price. It reduced the target price to Rs 190 from Rs 200. The current target price implied a 14% upside from Tuesday's closing price.
Samvardhana Motherson International Q2 Highlights (Consolidated, YoY)
Revenue up 18.2% to Rs 27,811.86 crore versus Rs 23,527.46 crore.
Net profit up 223% to Rs 948.81 crore versus Rs 294.15 crore.
Ebitda up 23% to Rs 2,447.94 crore versus Rs 1,987.80 crore.
Margin at 8.8% versus 8.4%.
Samvardhana Motherson International share price fell 2.49% to Rs 161.91 apiece.
Samvardhana Motherson International share price fell 3.44% to Rs 160.33 apiece, the lowest level since June 10. It was trading 2.57% lower at 161.75 apiece as of 10:22 a.m., as compared to 0.83% decline in the NSE Nifty 50 index.
It has risen 80.69% in 12 months, and 58.84% on a year-to-date basis. Total traded volume so far in the day stood at 6.1 times its 30-day average. The relative strength index was at 23.47, which implied the stock is oversold.
Out of 23 analysts tracking the company, 19 maintain a 'buy' rating, three recommend a 'hold,' and one suggests 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 18.4%.
