Samvardhana Motherson slips 6% in two days; weak growth in overseas business weighs

Samvardhan Motherson's shares in Friday's session (November 10) continued their losing streak for the second day after the company posted a weaker-than-expected Q2 performance.

From its closing on Wednesday at Rs 92.85, the stock at the day's low in today's trade has lost close to 6 per cent.

For the Q2 period, the company reported revenue of Rs 2,221.18 crore, higher in contrast to Rs 4,238.61 crore registered in the same period last year. Profit for the September 2023 quarter inched higher to Rs 250.53 crore, up 17 per cent year-on-year (YoY).

Domestic brokerage Motilal Oswal has reiterated its buy call on the stock with a target price of Rs 110. The brokerage is bullish on the counter as it sees receding cost headwinds and the realignment of capacities in developed markets to boost the company's efficiency going forward.

"The next three quarters would be transitory because of the continuous consolidation of five other businesses between 3QFY24 and 1QFY25. We maintain our FY24/25E EPS as an incremental contribution from the acquisition of SAS will be offset by higher interest and depreciation costs," the brokerage added.

Currently, "we are not modelling the performance of new acquisitions, which are yet to be closed. Maintain BUY with a TP of INR110, based on Sep’25E SoTP and including INR8/share for the recent acquisitions," the brokerage said.

Global brokerages are mixed on the counter and maintain different views. Here is a compilation of the brokerages' different calls: