Umair
Last Updated:
Samvardhana Motherson sought to allay investor concerns after Donald Trump proposed 25% tariff on foreign car imports
Samvardhana Motherson Share Price Today
Samvardhana Motherson International Ltd (SAMIL) shares will be in focus in Friday’s trade after the auto ancillary company sought to allay investor concerns after its shares tumbled amid fears of Donald Trump’s proposed 25% tariff on foreign car imports.
Samvardhana Motherson International Ltd (SAMIL) has sought to reassure investors following a 2.22% drop in its stock price to Rs 132 on March 27. The decline came amidst broader losses in the auto and auto component sectors, with other stocks like Tata Motors and Sona BLW Precision Forgings also seeing declines of up to 7%. The dip in shares is attributed to investor fears that potential tariff hikes, especially from a proposed 25% tariff on foreign car imports by Donald Trump, could disrupt global supply chains.
In a regulatory filing, SAMIL clarified that a significant portion of its US business is either locally produced or qualifies under the US-Mexico-Canada Agreement (USMCA), reducing the company’s exposure to potential tariff increases. The company stated that it “does not expect a material impact” on its operations, emphasizing its extensive local manufacturing capabilities in both the US and Europe, which provide a buffer against tariffs targeting imports.
CLSA Remains Bullish, Sees 23% Upside
Despite concerns over tariffs and market volatility, CLSA has maintained an ‘outperform’ rating on SAMIL, setting a target price of Rs 167, suggesting a 23% upside from its current level. The brokerage forecasts the company’s revenue to grow at an 11% compound annual growth rate (CAGR) between FY25 and FY27, reaching $16 billion by FY27. CLSA also anticipates EBITDA margins of 9.5% during this period.
SAMIL’s stock has dropped nearly 35% over the past six months due to macroeconomic concerns, tariff risks, and a valuation de-rating. However, analysts believe that the company’s localized production strategy and USMCA compliance will protect it from tariff-induced disruptions more effectively than competitors heavily reliant on exports.
Part of the Motherson Group, SAMIL operates 400 facilities in 44 countries, with its three major divisions—Wiring Harness, Vision Systems and Modules, and Polymer Products—accounting for over 95% of its revenues. Despite the recent concerns, the company reported a consolidated net profit of Rs 879 crore for the third quarter of FY24, up from Rs 542 crore during the same period last year. Revenue from operations also rose to Rs 27,666 crore, compared to Rs 25,644 crore in the previous year.
Among the 25 analysts covering the stock, 21 maintain a ‘buy’ recommendation, while two suggest ‘hold’ and two recommend ‘sell.’ While macroeconomic risks and uncertainties around US trade policies persist, analysts remain optimistic about SAMIL’s strategic positioning through localized manufacturing and USMCA compliance, which could provide an edge over competitors more exposed to export-driven risks.
While market concerns around Donald Trump’s proposed tariff loom, SAMIL’s diversified operations and local manufacturing strategy appear to position it better than many of its competitors in the auto component sector.
