Samvardhana Motherson share rallies 6% on cost optimisation measures

The company had about 1.03 million shares change hands in a block trade on Friday

Shares of Samvardhana Motherson International surged over 6 per cent after it committed to taking cost optimisation measures to improve operating efficiencies amid rising global volatility. 

 

Samvardhana Motherson’s stock rose as much as 6.17 per cent during the day to ₹120 per share. The stock trimmed gains to trade 4.8 per cent higher at ₹118.4 apiece, compared to a 2.15 per cent decline in Nifty 50 as of 11:48 AM. 

 

Shares of the company rose over 10 per cent from its recent lows of ₹107.3 earlier this month. The stock has fallen 24 per cent this year, compared to a 3.7 per cent fall in the benchmark Sensex. Samvardhana Motherson has a total market capitalisation of ₹83,588.54 crore, according to BSE data. 

 

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The company also had about 1.03 million shares change hands in a block trade on Friday, according to Bloomberg.  

 

The Auto components manufacturer said that the dynamic automotive production environment with increased complexity across the supply chain and regulatory uncertainties are driving global volatilities. "To be prepared to operate in this evolving landscape and to breathe with the market, the company, via its subsidiary SMRP BV, has proactively initiated a series of transformative measures in Central and Western Europe." 

 

The company plans to cut costs in Europe to save 50 million euros per year. The measures would include various operational initiatives and active engagement and collaboration with the local workmen's representative associations. The company will work on defining an optimisation plan for adjusting and recalibrating the workforce in respective countries, it said.  

 

The proposed transformative measures will be implemented in a phased manner and would be targeting the optimisation of a cost block of approx, it said in the statement. The cost block under optimization includes various elements such as salary, benefits, overheads, cost of leased and contract employees, etc. 

 

Samvardhana Motherson International (formerly known as Motherson Sumi Systems Limited) is a globally diversified manufacturer and a full-system solutions provider to customers in automotive and other industries. The Company is one of the world's largest and fastest-growing suppliers for Original Equipment Manufacturers (OEMs) in the automotive industry.

 

In February, the company entered into a joint venture with Japan's Sanko, a player in the material handling sector, to provide sustainable packaging solutions in India and Europe. The joint venture (JV) will contribute to greater efficiencies in material handling with cost reduction in overall logistics spending.