After Nomura, Jefferies double-upgrades Samvardhana Motherson shares; stock hits fresh 52-week high

Samvardhana Motherson share price: Shares of Samvardhana Motherson International, the auto components & equipment company, hit a fresh 52-week high of Rs 97.03 on the BSE on Thursday. The stock has been on a rising spree and has jumped 14 per cent in the last seven sessions. At the time of writing this news, the stock was trading at Rs 95.51, up 2.61 per cent.

Global brokerage Jefferies has double-upgraded the stock to "Hold" from "Buy" with a target price of Rs 115. Before this, Nomura also double-upgraded the stock to Buy and raised the target price to Rs 105 from Rs 90 earlier.

Jefferies notes that after four troublesome years, the company's operating performance has been improving. Between FY23 and FY26, the company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) are expected to grow by two times, while earnings per share (EPS) are estimated to increase by three times. Between FY24 and FY25, the company's EPS has been raised by 18–42 per cent. Jefferies further said that the company will benefit from the new acquisition.

Last week, Samvardhana Motherson announced it would acquire an 81 per cent stake in the four-wheeler business of Yachiyo Industry, a Honda Motor subsidiary. The company said it has entered into a partnership with Honda Motor under which it will form an 81:19 strategic partnership with the latter, where both partners will drive the company towards a strong and sustainable future and be fully prepared for next-generation products and technologies. 

Yachiyo Industry Co., Ltd. is a publicly listed firm on the Tokyo Stock Exchange. It is a subsidiary of Honda Motor Co., Ltd. It has four-wheeler (4W) and two-wheeler (2W) businesses.

ABOUT SAMVARDHANA MOTHERSON 

Samvardhana Motherson International Ltd (SAMIL) formerly known as Motherson Sumi Systems Limited, caters to the automotive industry. The company's product portfolio includes door panels, instrument panels, bumpers, centre consoles, decorative interior trims, assist system signal lights, blow moulded components, and high-precision plastic parts.