Near-term demand woes to keep Samvardhana's margins under pressure

The stock of the largest listed auto component company Samvardhana Motherson International has shed about 23 per cent of its value over the past month. The latest trigger for the downward trend has been the weaker than expected September quarter (Q2FY25) results. A muted operating performance in the quarter resulted in the stock falling over 8 per cent over the past couple of trading sessions.

 

The company’s operating profit margin slipped by 80 basis points on a sequential basis to 8.8 per cent and was lower than street expectations. In addition to seasonality, the lower profitability was on account of