MOTHERSON - Samvardhana Motherson International Limited Share Price

For the financial year 2026, Samvardhana Motherson International Limited achieved record revenues of INR 1.25 lakh crores, marking an 11% year-on-year growth. The highest quarterly revenue in Q4 FY 26 grew 17% year-on-year, supported by a diversified business model. The company saw a significant increase in EBITDA by 42%, with margins improving by 200 basis points year-on-year. The normalized PAT grew by 66% in Q4 FY 26, and for the full year, PAT increased by 17%, despite challenges posed by inflation and geopolitical uncertainties.

The management outlined a promising outlook, noting a robust book business value of USD 96 billion, with 22% attributed to electric vehicle (EV) programs. They maintain a capex discipline with a planned investment of approximately INR 6,000 crores for FY 27. This will be split evenly between growth and maintenance capex, with a focus on consumer electronics and emerging businesses.

Key points highlighted include:

• Revenue for FY 26 exceeded INR 1.25 lakh crores, with a growth of 11%.
• Record EBITDA margins at 9.5%, showing resilience under inflation pressures.
• Strong performance in consumer electronics, achieving a 7.5x year-on-year revenue growth.
• The aerospace business's order book increased by over 20% to USD 1.6 billion, indicating substantial long-term visibility.
• The ongoing transformation measures in Europe, costing about INR 177 crores, aim to optimize operations.
• A proactive approach to manage costs and maintain strong customer relationships, essential for future profitability.

The management remains optimistic for FY 27, drawing on a combination of increased vehicle content, ongoing electrification trends, and strengthening OEM relationships, further supported by their Vision 2030 aspiration to reach USD 108 billion in revenues.

Q: Can you talk a bit directionally about the outlook for FY 27 for integrated assemblies? You've highlighted 2x new program launches in comparison to '26, would that mean strong growth in double-digits, high-teens for next year?

A: We're very pleased with MSAS's performance. We've integrated acquisitions successfully and see significant growth potential, although it depends largely on customer car sales. We expect meaningful growth this year due to new program wins and diversifying our offerings. While I can't give specific numbers, we are optimistic about growth in this segment.

Q: Can you help us understand the latest situation regarding the cost increases and the lag in pass-through for overheads like energy and polymer prices? Are these contractual or negotiated?

A: It varies by customer; some have contractual arrangements while others are negotiable. The relationships with our customers are stronger due to market volatility. We're managing operational efficiencies to offset costs, and while there may be lags, we have meaningful discussions to recover these costs.

Q: When do you expect the Nexon deal to be completed and begin booking revenues?

A: We anticipate closing the Nexon deal by the end of June or early July, during which we will consolidate it once we've obtained the necessary regulatory approvals.

Q: How is your debt structured to protect against rising yields? Will there be higher interest costs going forward?

A: Our debt comprises both fixed and floating rates. It's moderately protected from yield spikes. While we do have some exposure, our current net debt is at its lowest, which positions us well to maintain control over interest costs.

Q: Currently, what is the utilization level of your consumer electronics division, and how will revenue pace here?

A: The third plant is in its start-up phase, so current utilization is zero. However, once operational, we're confident it will ramp up quickly, significantly boosting revenue. Our existing plants (GF1 & GF2) are at full capacity, and the growth expected from GF3 is promising.

Q: Can you update us on the restructuring in Europe? What percentage is complete, and should we expect more benefits?

A: A large portion of the restructuring in Europe is complete, but challenges remain due to macroeconomic conditions. We'll continue to seek operational efficiencies and enhance acquisitions to boost growth. Future restructuring will likely yield significant benefits.

Q: What percentage of revenues comes from EVs currently, and how does that compare to your order book?

A: Currently, EVs account for about 11% of our revenues. The order book for EVs is growing, now representing 22%. However, our business remains engine-agnostic, serving both EV and traditional powertrains, allowing us to cater to diverse market demands.

Q: What factors are driving the tremendous growth in the precision metal and modules segment?

A: Growth in this segment comes primarily from our Atsumitec acquisition and operational improvements. We've also made strategic acquisitions like Rollon, which enhance our machining capabilities. This segment shows potential not just within automotive but also in aerospace and consumer electronics.

Q: Could you clarify your guidance on consumer electronics capex? Are we on track to meet previous guidance?

A: Yes, we remain aligned with our prior guidance of Rs.2,600 crores for the consumer electronics sector. We're finalizing this year's numbers and expect they will be similar, reflecting our continued investment in growing this business.

Q: What's your order book outlook for consumer electronics to be executed in FY 28?

A: Based on current trends, we expect around USD 1.4 billion in orders for consumer electronics to be executed in FY 28. However, this depends on customer demand and future orders, which can fluctuate based on market dynamics.

This Q&A highlights the key inquiries made during the earnings conference call, alongside the respective detailed responses from management, adhering to the character count and specificity requested.