Buy Samvardhana Motherson International; target of Rs 120: Emkay Global Financial

Emkay Global Financial' research report on Samvardhana Motherson International

We attended SAMIL’s analyst meet, where it laid out a bold and transformative roadmap over FY25-30. KTAs: 1) Having outperformed the auto industry 2.5x faster in last 5Y, SAMIL has set its sight on USD108bn revenue (4x vs USD25.7bn in FY25) and 40% ROCE by FY30. 2) SAMIL has strategically seeded several emerging businesses (aerospace, consumer electronics, etc) in the last 5Y, positioning itself to capture global opportunities. 3) SAMIL has prioritized emerging market greenfields in last 5Y (mainly India) and is further sharpening its India emphasis. 4) SAMIL has been hand-picked by one of the largest global consumer electronics brands, entrusting it to develop the electronics ecosystem in India with a multibillion-dollar orderbook and profitable operations from Day 1. 5) SAMIL has built one of India’s fastest growing aerospace businesses (+USD1bn orderbook; only Indian exporter to Japan) despite its recent entry, thus cementing a path for accelerated growth up the value chain, also via strategic M&A (France-based AD Industries for propulsion systems). 6) Graduating from basic components to integrated assemblies, SAMIL aims for full car assembly by FY30. 7) Chinese OEMs are spreading wings globally and SAMIL intends capturing this opportunity by leveraging its dominant global manufacturing presence. 8) The mgmt also hinted at potential independent listing of certain businesses upon maturity.

Outlook

We believe that over next 5Y, newer businesses (esp consumer electronics) and its India focus would drive a major delta in SAMIL’s growth trajectory. We retain BUY; TP unchanged at Rs120.

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Samvardhana Motherson International - 08092025 - emkay