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Q4FY25 Result Highlights Samvardhana Motherson International Ltd (SAMIL) reported mixed set of earnings in Q4FY25. Consolidated revenue reached Rs 29,317 cr, marking an 8.3% YoY increase. EBITDA stood at Rs 2,643 cr, reflecting a 10% YoY decline. Net Profit fell to Rs 1,115 cr, down 22.8% year-on-year. PAT saw a decline amid lower effective tax rate owing to weak operational performance. Margin performance was disappointing in Q4, despite the quarter typically being the seasonally strongest. EBITDA margin declined 70 basis points sequentially to 9.0%. The weak performance was primarily driven by rising costs.

The wiring harness business performed well, growing 5% year-on-year to Rs 8,590 cr, with EBITDA margins improving by 130 basis points to 12.4%. The modules and polymer products segment posted a 12% revenue increase to Rs 15,360 cr, primarily driven by acquisitions, though core growth was muted amid global OEMs realigning supply chains due to tariff-related uncertainty. This impacted profitability, with margins declining sharply by 430 basis points to 6.5%.

The vision systems business stood flat at Rs.4,970 cr, with margins falling 90 basis points to 12%, while the integrated assemblies segment also remained flat at Rs.2,400 cr, and margins declined by 220 basis points to 10.6%. To support customers, three new greenfield plants are being developed in China and Mexico. Emerging businesses delivered robust revenue growth of 41% year-on-year to Rs 3,230 cr but suffered a 500 basis point margin decline to 12.1%, affected by the turnaround of AD Industries and new facility ramp-ups in aerospace and consumer electronics.

Other Key Highlights (FY25) - Consolidated

• Revenue reached Rs 113,600 cr, marking a 15% year-on-year increase. EBITDA stood at Rs 10,877 cr, reflecting a 17% year-on-year growth. PAT (concerned share) rose sharply to Rs 3,803 cr, up 40% year-on-year.
• The net debt to EBITDA ratio improved to 0.9x, the lowest in the last five years. Over the past five years, the company achieved a compound annual growth rate (CAGR) of 19% in revenue, 21% in EBITDA, and 68% in PAT.
• In FY25, the company completed 23 new acquisitions, strengthening its business portfolio.
• The product profile was expanded significantly, with new partners added to support broader offerings.
• The company is actively diversifying beyond the automotive sector, positioning itself as a comprehensive solution provider to customers.
• The decline in polymer product volumes in the European market came as an unexpected development.

Key Conference Call Takeaways

Industry Trends, Diversification & Segmental Strategies

• Despite a ~1% global decline in light vehicle production (to 89.7mn units), India and China maintained resilience with low single-digit growth.
• Tailwinds include increasing EV/hybrid penetration, SUV demand, and premiumization.
• SAMIL’s "global-local" strategy helps mitigate trade and tariff risks; US sales are largely USMCA-compliant, with proactive tariff pass-through measures in place. Hence, it does not see any material financial impact due to the ongoing tariff headwinds.
• It achieved 3CX10 customer metric with 50% of revenue from emerging markets. Revenue is evenly split between developed and emerging geographies.
• Cost optimization plan in Western & Central Europe targets EUR 50 million over the next few years.
• Eyeing structural shifts in developed markets for reshoring and M&A opportunities.
• Vision Systems (SMR): Strong camera monitoring system growth; over $400mn in lifetime sales.
• Aerospace: 5x growth; now a Tier-1 supplier to Airbus. AD Industries (earlier loss-making) is under turnaround with synergy capture and greenfield expansion in Bengaluru. The company is also pivoting into semiconductor equipment components.
• Consumer Electronics: Rapid ramp-up underway; capacity to hit 15–17 million units by FY26-end. Includes new vertical integration and a PCBA plant. Current focus on phone glass with expansion potential.
• Yachiyo (Sunroofs & Fuel Tanks): Previously Honda-exclusive, now cross-selling to global OEMs. The fuel tank business is gaining from the hybrid vehicle demand.

Margins & Segment Performance (FY25)

• Modules & Polymer Products (MPP): Faced cost pressure due to launches and customer mix; transformative cost-saving plan of EUR 50mn expected to improve margins in FY26.
• Wiring Harness: Strong global margins due to VAVE, optimization, and insourcing. Margin pressures in India due to capacity expansions and delayed launches, but returns remain solid.
• Aerospace Margins: Temporarily lower due to greenfield ramp-up and AD Industries integration, expected to improve as synergies materialize.
• PCBA capacity expansion is being pursued for both auto and non-auto demand; 15 global PCBA lines already in operation.

Capital Allocation & Outlook

• M&A philosophy remains disciplined - management only pursues acquisitions with strong customer backing.
• 47 acquisitions in the past have been deemed successful due to this customer-centric approach.
• Organic growth in FY25 was flat at 7–8%, with Rs 8,500 cr added inorganically, and margins were impacted by tariff-led uncertainties in many regions and start-up costs for greenfields in non-auto.
• Consumer electronics consolidated under Lighting & Electronics; eligible for PLI and state manufacturing incentives.

Guidance

• Vision 2030 targets gross revenue of US$108 billion (vs. ~$26 billion in FY25) with a sustained ROCE goal of 40%.
• Further details on the long-term plan to be shared at the Investor Conference in Mumbai (Sep–Oct 2025).
• The board has approved an annual in-principle debt raise of Rs 8,500 cr—standard practice, not linked to any immediate need.
• Management remains highly confident about future growth across auto and non-auto sectors, emphasizing diversification, resilience, and a robust order book.
• Focus continues on low leverage, high execution, and prudent capital allocation with the belief that “the future is bright.”
• FY26 Capex guidance stands at ~Rs 6,000 cr (+/-10%), split evenly between maintenance and organic growth. Almost 70% of the organic growth capex would be invested in non-auto business.
• Large order book in place: ~$88 billion.
• Management expects to deliver improved margins in FY26, supported by operational efficiencies and recovery in key segments.

Outlook & valuation

Samvardhana Motherson delivered a mixed set of numbers for the quarter ended Q4FY25. Organic growth was flat YoY, and margins were impacted by tariff-led uncertainties in many regions and start-up costs for greenfield in non-auto. We believe that SAMIL is emerging as one of the major beneficiaries of the rising premiumization trend and EV transition, which in turn is expected to drive higher content going forward. With a strong global market position across segments, a well-diversified business profile across products, segments, customers, and geographies, inorganic growth, and focus on EV penetration, the company is positioned favourably for sustained growth in the coming quarters. We are optimistic about the stock due to favourable growth prospects expected soon for its non-automotive sectors, especially aerospace and consumer electronics. We expect Samvardhana Motherson to continue to outperform global automobile sales, fuelled by rising premiumization and EV transition, a robust order backlog in autos and non-autos, and successful integration of recent acquisitions.

Global demand trends in PV and CV segments are likely to remain muted in the near term. However, we expect SAMIL to continue its growth momentum, aided by increasing content/vehicle, growth in non-automotive business, and inorganic growth. Motherson has a track record of setting ambitious five-year targets since 2000. We expect Motherson to continue outperforming global automobile sales, fuelled by rising premiumization and EV transition, a robust order backlog both in autos and non-autos, and successful integration of recent acquisitions. At a CMP of Rs.160, the stock is trading at 22x FY27E. We maintain a HOLD rating on the stock.