What are brokerages saying about this auto components maker post Q1 show?

Samvardhana Motherson Q1 results impact, analysis: Auto components major Samvardhana Motherson International (SAMIL) posted a weak June quarter (Q1FY26), with profitability hit by cost pressures, delayed client programmes, and start-up expenses at new plants. Yet, several brokerages remain optimistic on its medium-term prospects, citing strong execution capabilities, diversified presence, and resilient order book.

 

On the bourses, Samvardhana Motherson shares fell up to 1.91 per cent to an intraday low of ₹91.65 per share. Around 9:40 AM, the stock was trading 1.10 per cent lower at ₹92.41. In comparison, BSE Sensex was flat with a positive bias at 80,570.65 levels.  FOLLOW LATEST STOCK MARKET LIVE UPDATES

Samvardhana Motherson Q1 performance 

 

SAMIL’s consolidated net profit fell 48.5 per cent year-on-year (Y-o-Y) to ₹512 crore against ₹994 crore in the year-ago period, dragged by softer margins and higher costs. Revenue rose 4.7 per cent Y-o-Y to ₹30,212 crore from ₹28,868 crore, aided by steady volumes across geographies. Ebitda dropped 11.4 per cent Y-o-Y to ₹2,458 crore, with operating margins slipping to 8.1 per cent in Q1FY26, from 9.6 per cent last year.

 

Brokerage views: Cautious short term, constructive long term

 

Motilal Oswal noted that adjusted PAT of ₹620 crore missed its estimate by a wide margin due to multiple headwinds pressuring margins. Management indicated most cost escalations were temporary, expecting performance to revive from Q3 as Q2 tends to be seasonally weak in Europe. The brokerage cut FY26 and FY27 earnings estimates by 9 per cent and 2 per cent, respectively, but retained its ‘Buy’ rating with a revised target price of ₹114 (24x Jun’27E EPS).

 

Nuvama said revenue growth of 5 per cent Y-o-Y was in line with expectations, but Ebitda missed estimates by 5 per cent due to delayed European model launches, integration adjustments, and greenfield start-up costs. It cut FY26E/27E Ebitda by 4 per cent/5 per cent, but maintained a ‘Buy’ rating, citing strong management, robust order book, and rising content per vehicle. Its revised TP stands at ₹110 (earlier ₹117).  ALSO READ | Apollo Hospitals Q1: Analysts up targets, share outlook; buy, sell or hold? 

JM Financial pointed to structural challenges in the EU, tariff-associated costs, and greenfield start-up expenses as key drags on margins, which at 8.1 per cent were 100 bps below its estimates. While global light vehicle demand remains subdued, SAMIL is outperforming through higher content per vehicle driven by premiumisation. 

 

Meanwhile, JM expects near-term margin pressures to persist given weak demand in developed markets and ramp-up costs, and has trimmed FY26E/FY27E Ebitda margin forecasts by 20 bps/30 bps. Still, it maintained a ‘Buy’ rating with a March 2027 target of ₹110 (19x FY27E EPS), flagging recovery in global LV demand as a key monitorable.

 

Jefferies reportedly maintained its ‘Buy’ stance with a reduced target of ₹110 (from ₹120), noting that margins should improve as European cost optimisation and plant ramp-ups take hold. The brokerage also highlighted SAMIL’s ongoing diversification into non-auto segments, especially electronics.  ALSO READ | ONGC Q1: Brokerages split on weak crude view, trimmed production targets

Samvardhana Motherson outlook: Temporary pain, structural positives

 

Across the board, brokerages see Samvardhana Motherson's Q1 weakness as transitory, with cost headwinds, delayed programmes, and plant ramp-ups expected to normalise over the next few quarters. Geographic diversification, a proximity-to-customer model, and expansion into higher-value segments like automotive electronics position SAMIL to navigate trade risks and macro softness.

 

Consensus remains positive, with all four brokerages maintaining ‘Buy’ ratings despite trimming near-term forecasts. The Street expects margin recovery from H2FY26, backed by operating leverage, greenfield scale-up benefits, and integration synergies from recent acquisitions.