The brokerage house Nomura has maintained a ‘Buy’ rating to Samvardhana Motherson International. The brokerage raised the target price of this Auto Ancillaries stock to Rs 155 from Rs 140. This translates to an upside potential of 17% from the current market price.
According to the brokerage report, the target price was raised on the back of a strong fourth-quarter performance, strategic acquisitions, a robust order book, and several other factors.
Let’s take a look at the key reasons why the brokerage house is bullish on this stock and the rationale behind it –
Strong Q4 FY26 performance
The automotive component manufacturer’s Q4 results significantly beat expectations, with EBITDA coming in 21% ahead of consensus. This was driven by a strong revenue beat in the Wiring Harness and Emerging Business segments, as well as higher-than-expected EBITDA margins in integrated assemblies and emerging businesses.
Growth from strategic acquisitions
Nomura increased its estimates to account for the integration of the Nexans and Yutaka Giken acquisitions, both of which are expected to close in the first half of FY27. These acquisitions are expected to contribute to a 5–7% increase in EPS estimates.
Expansion into non-auto segments
As per Nomura report, there is a strong organic growth outlook driven by non-automotive sectors, particularly consumer electronics and aerospace. The aerospace order book has grown by over 20% to $1.6 billion, and a new consumer electronics plant (GF3), which is a multiple of current capacity, is scheduled for commissioning in Q3FY27.
Favourable currency tailwinds
A favourable EUR/INR exchange rate (estimated at 112) is expected to support higher revenue and earnings. This foreign exchange benefit, combined with the Q4 beat and new acquisitions, led Nomura to raise its revenue estimates for FY27–28 by 8–10%.
Long-term visibility from a record order book
Samvardhana Motherson has reached an all-time high order book of $96 billion, providing a very strong and predictable pipeline for future revenue.
Furthermore, this order book is strategically diversified to capture future market shifts, with 22% of the total booked business dedicated to the Electric Vehicle (EV) segment
Samvardhana Motherson’s share price performance
The share price of Samvardhana Motherson has risen 4.5% in the last five trading days. The stock has given a return of over 6% in the past one month and 23% in the last six months. Samvardhana Motherson’s stock price has increased more than 35% over the previous one year.
Samvardhana Motherson Q4FY26
The company reported a consolidated net profit of Rs 1,497 crore in the fourth quarter of FY26, representing a growth of 42.5% year-over-year, compared to Rs 1,051 crore profit recorded in the same quarter a year back.
The company’s revenue from operations came in at Rs 34,309 crore for the reporting quarter, reflecting a growth of 17% YoY from Rs 29,317 crore reported in Q4 FY25.
On the operating front, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) came in at Rs 3,792 crore for Q4FY26, a 43.4% YoY jump from Rs 2,640 crore posted in the same period a year ago.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.
