MOTHERSON - Samvardhana Motherson International Limited Share Price

Question: "With your ventures into semiconductor, aerospace, health and medical CDMO, how do you create cost or capability synergies that enhance overall ROCE at a group level? Which of these synergies are quantifiable in terms of capital efficiency?"
Answer: Our focus is on being a preferred sustainable solution provider. We pursue opportunities selectively, aiming for 40% ROCE. We leverage synergies, especially in wiring harnesses and plastics, while collaborating with technology partners for consumer electronics. We validate concepts on a smaller scale before global expansion, ensuring that once we enter a market, we have customer backing. Our proven success in automotive supports the pursuit of new industries, maintaining financial discipline and operational efficiency.

Question: "Is it fair to say that we follow a 'fail-fast' model, scaling up only promising ventures, and are we gaining empirical evidence to support our capital deployment strategy?"
Answer: Yes, we adopt a 'fail-fast' approach. In automotive, our mature relationships allow us to innovate in-house rather than venture into uncertain markets. For new sectors, we mitigate risk by partnering with established firms. This model allows us to focus on proven opportunities, ensuring robust financial discipline while maintaining a consistent approach aligned with customer needs.

Question: "What drove the big margin expansion in the modules and polymer division, and can we expect this improvement to be sustainable?"
Answer: The margin improvement comes from streamlined operations and past acquisitions, positioned for long-term growth. We're actively implementing AI, automation, and robotics to drive further efficiencies. Although there could be impacts from copper prices, the significant improvements stem largely from the restructuring efforts in Europe, indicating that this enhancement is sustainable.

Question: "How do you assess the risk of Chinese OEMs becoming stronger in Europe? Does it worry you?"
Answer: We don't speculate on market dynamics; automotive trends fluctuate over time. Our long-term experience shows that the best vehicles will resonate with customers regardless of origin, including both European and Chinese manufacturers. We believe that established players will adapt and retain competitive strength, evidenced by ongoing innovations in markets like EVs.

Question: "What has driven the ramp-up in the aerospace and consumer electronics segment, and what percentage of revenue is contributed by these sectors?"
Answer: Our aerospace and consumer electronics segments have each shown remarkable growth, with consumer electronics up 75% sequentially and aerospace over 40% year-on-year. While I can't break out specific revenue contributions, these sectors combined are integral to our emerging business's impressive growth rate exceeding 50%, indicating a strong trajectory moving forward.

Question: "Can you provide guidance on expected capex for the year, having spent INR 4,200 crores so far?"
Answer: We anticipate finishing the year with capex around INR 6,000 crores, consistent with our previous guidance. For FY '27, we'll update guidance in March, as we monitor our capex strategy based on evolving opportunities and market conditions.

Question: "What specific metrics will indicate if the aerospace-semi-conductor sector is sustaining its growth, apart from revenue?"
Answer: Tracking our customer base will be crucial"”our partnerships with top-tier players in aerospace like Airbus and Boeing indicate long-term viability. Additionally, the caliber of semiconductor clients will provide a measure of both partnership stability and growth potential, ensuring this isn't merely a short-term phase but a strategic, sustained expansion.

Question: "What single constraint might hinder the aerospace to semiconductor growth transition?"
Answer: Our longstanding commitment ensures we don't exit once invested. We gauge constraints like customer trust and engineering expertise. We have a calculated approach to building capacity and partnerships, which we believe fosters sustainable growth, rather than pursuing fleeting opportunities.