MOTHERSON - Samvardhana Motherson International Limited Share Price

Question: "I wanted to understand on the modules and polymer division, we have seen a pretty good step up during this quarter, probably a little ahead of expectations. If you could articulate what are the, just this journey, what exactly are you doing? What are the steps? Where are we in this journey? How much has happened and how much more is left?"
Answer: Over the last couple of years, we've undergone a transformative journey, particularly in Europe, addressing excess capacity and restructuring. We've integrated troubled suppliers, revamped leadership, and invested in operations. I believe around 75%-80% of the restructuring is done, focusing on efficiency and moving older programs to newer, more profitable ones. We're optimistic about continued performance improvements as we capitalize on better margins.

Question: "You talked about hiring 5,000 engineers and also expanding capabilities in GenAI. Can you articulate a bit more what exactly is the vision here? Or what is your thought? What are the opportunities here from your perspective that you are trying to tap?"
Answer: We aim to enhance automation and software capabilities, currently harnessing around 5,000 engineers. Our goal is to double this by fostering partnerships and internal growth, enabling us to streamline operations and improve efficiency in response times to customer needs. This will bolster our competitive edge and prepare us for significant growth, supported by substantial investments in automation technologies.

Question: "You mentioned that premium car makers, they are going to come up with a significant launch plan. By when can we expect a ramp-up of this plan?"
Answer: The ramp-up largely depends on the automakers' production schedules and results. New EV models are coming up that have benefited from extensive development time and improvements over their predecessors. We're optimistic as automakers are now mastering EV developments while maintaining a balanced approach across different powertrains"”ICE, hybrids, and EVs. Each segment has potential, and we're well-equipped to leverage this.

Question: "The order book is large at $87 billion for the next five, six years. Within this order book, would it be possible to indicate how would be the breakup between all new orders and replacement orders?"
Answer: We aim for a balanced approach, reflecting both new and replacement orders within our $87.2 billion book. We reflect a current EV revenue share of about 11%. Future growth is envisaged with shifts in automotive platforms, accommodating both EV and non-EV variants. Our order book suggests that as the market grows, our opportunities will too, keeping pace without overcommitting to any single powertrain.

Question: "Can you indicate what led to the improvement in profitability in the emerging business? Was there one-off cost in Q1?"
Answer: In Q1, we assimilated Atsumitec, which had lower margins initially. As we ramp up our consumer electronics business and improve Atsumitec's performance, profitability has risen to 9.5%. We anticipate continued margin improvements as our other businesses, including aerospace, also ramp up in response to favorable market conditions, enhancing our profitability trajectory.

Question: "On the aerospace side, 37% growth in H1 is a very strong number. And has there been improvement on the profitability side?"
Answer: Yes, our growth in aerospace is strong, backed by investments in CAPEX to enhance our facilities for high-precision propulsion parts. Customer trust is growing as we win orders and improve operations. We expect profitability stabilization as we optimize our operations further. Overall, there is a positive sentiment, and we anticipate continuing this upward trend with additional opportunities emerging.

Question: "Can you share a little bit more on how is the split between the consumer electronics and energy order books and what sort of conversion timeline should we be looking at?"
Answer: While I can't share specific breakups due to confidentiality, I can say that consumer electronics orders are expected to ramp up quickly due to their shorter timelines, while aerospace orders will build more gradually over time. We're optimistic for substantial growth in both sectors in the coming periods.

Question: "You mentioned the tariff impact of $10 million. Is it that we are in the phase of conversations with the customers and this will eventually be passed through?"
Answer: Yes, we're engaging with customers to manage the $10 million tariff impact. Ahead, we plan to negotiate fair solutions shared with our clients, emphasizing the strategic decisions we've made to be regionally focused, which mitigates impact compared to larger potential figures. Maintaining these relationships is crucial, and we hope to find common ground to address these costs in future contracts.