Brokerages cheer Motherson's Nexans auto deal, see global PV wiring upside

Automotive components maker Samvardhana Motherson International Ltd (SAMIL) has drawn a positive response from brokerages after announcing a proposed acquisition of Nexans Autoelectric’s wiring harness business, a move seen as strategically important for expanding its global passenger vehicle (PV) footprint and strengthening long-term earnings visibility.

 

On December 22, 2025, the auto components major said it had entered into exclusive negotiations to acquire a 100 per cent stake in Nexans Autoelectric GmbH and Elektrokontact GmbH through its wholly-owned subsidiary (WOS) Motherson Global Investments B.V. The transaction will be carried out via a series of share and asset purchase agreements and is expected to close by Q1FY27, subject to regulatory approvals and employee consultations.

 

Entry into Global PV wiring harness space

 

Nomura, in a note, said the acquisition marks SAMIL’s formal entry into the global PV wiring harness segment outside India, an area where the group previously had limited exposure. The brokerage pointed out that while Motherson already has a strong presence in wiring harnesses in India and supplies modules and polymer-integrated assemblies to global OEMs, global PV wiring harnesses (ex-India) remained a key whitespace in its portfolio.

 

Nomura highlighted that Nexans Autoelectric, established over 60 years ago, is a leading global manufacturer of automotive wiring harnesses for both passenger and commercial vehicles. In CY24, the business reported revenues of €749 million with Ebitda margins of around 6-6.4 per cent, with 81 per cent of revenues coming from passenger vehicles. More than half of its sales are derived from premium OEMs such as BMW and Mercedes-Benz, followed by Volkswagen, Audi and Porsche.  ALSO READ | Kajaria Ceramics flags fraud at bathware arm; brokerages see limited impact

Strategic fit and synergy benefits

 

According to Nomura, Nexans Autoelectric’s expertise in low- and high-voltage powertrain harnesses, body harnesses and specialty components complements SAMIL’s existing wiring harness and module business, enabling the company to increase content per vehicle. The brokerage added that SAMIL already supplies modules and polymer-integrated assemblies to several of Nexans Autoelectric’s customers, creating meaningful cross-selling opportunities and scope to raise wallet share.

 

Motilal Oswal, in its assessment, underscored the synergistic benefits from the transaction, including the combined development of next-generation products across passenger and commercial vehicles, access to Nexans Autoelectric’s technical know-how in highly automated engine harness manufacturing, and immediate entry into the customer base of premium global carmakers. Motilal Oswal also highlighted the expanded geographic footprint, noting that Nexans Autoelectric operates 22 facilities across 11 countries, strengthening SAMIL’s presence in Europe, North America and Asia.  ALSO READ | ICICI Securities sees strong outlook for Aditya Infotech; retains 'Buy'

Attractive valuation, EPS accretion seen

 

On the financial side, Nomura said the agreed enterprise value of €207 million on a cash- and debt-free basis implies an attractive valuation of around 4.3x CY24 EV/Ebitda. The brokerage expects the transaction to be cash EPS-accretive, with the potential to deliver a ~2 per cent uplift in earnings in the first year post-acquisition.

 

Maintaining its ‘Buy’ rating, Nomura set a target price of ₹127 to the Samvardhana Motherson International stock, valuing the stock at 19x P/E, which it described as being in the middle of SAMIL’s historical trading band. The brokerage noted that the stock is currently trading at around 18x FY28E earnings, which it sees as attractive given an estimated ~32 per cent EPS CAGR over FY26–28.

 

Motilal Oswal also reiterated its ‘Buy; rating on the stock with a target price of ₹129, on the back of strong long-term growth drivers such as rising premiumisation, the EV transition, a robust order backlog across auto and non-auto segments, and the successful integration of acquisitions. While flagging near-term risks from global tariff uncertainties, the brokerage said SAMIL is likely to be relatively insulated due to its localised manufacturing model and proximity to customers, positioning it as a potential long-term beneficiary of industry consolidation.   

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