Weak global auto volumes to keep Samvardhana Motherson under pressure

Samvardhana faces tight corners in auto market

Notwithstanding weak global automotive component demand, Samvardhana Motherson delivered a resilient performance in the October-December quarter (Q3). The company’s Q3 performance was broadly in line with Street estimates, as weakness on the revenue front was offset by better-than-expected gross margins and lower other expenses.

 

While the near-term outlook is affected by demand headwinds, the sharp price correction and strong Q3 performance have allayed investor concerns about growth and valuations. The stock of the automotive component major is down over 15 per cent in the past month.

 

Consolidated revenues for the company increased by just under 8 per cent, driven by