Samvardhana Motherson shares surge with large volumes; what's driving the stock

Samvardhana Motherson International share price today: Samvardhana Motherson International shares jumped almost six per cent on Monday after the auto ancillary company after the acquisition of Germany-based SAS Autosystemtechnik GmbH at an enterprise value of 540 million euros (around Rs 4,789 crore). Samvardhana Motherson shares jumped by as much as Rs 4.7 or 5.8 per cent to Rs 84.2 apiece on BSE with large volumes.

At 11:45 am, the Samvardhana Motherson stock quoted at Rs 82.3 apiece on BSE, up by Rs 2.7 or 3.4 per cent from its previous close. As many as 10.6 lakh Samvardhana Motherson shares had already changed hands for the day on the bourse, as against a daily average of almost 11 lakh in the past two weeks, according to provisional exchange data. 

Samvardhana Motherson acquires Germany company

Samvardhana Motherson International subsidiary Samvardhana Motherson Automotive Systems Group BV inked a pact with FORVIA group firm Faurecia to acquire SAS Autosystemtechnik GmbH, according to a regulatory filing on Sunday. 

SMRPBV said the transaction will be funded by a mix of debt and internal accruals.  

What analysts say on Samvardhana Motherson's acquisition of SAS Autosystemtechnik

Fundamental analyst Sandeep Jain said he "is not much confident" on Samvardhana Motherson, citing expensive valuations. He suggested investors to ‘hold’ the auto ancillary stock and avoid making fresh entries.  

According to technical analyst Kunal Saraogi, Samvardhana Motherson shares have been in a consolidation phase for a long time compared with its peers, which have staged good momentum. 

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He believes the stock faces strong resistance at Rs 85. Saraogi prefers other stocks in the space.

Jefferies maintained a ‘hold’ rating on Samvardhana Motherson with a target price of Rs 70 per share, pointing out that the acquisition will add 10-15 per cent to the company's revenue as well as EBITDA.  

Share price history 

Samvardhana Motherson shares have declined more than 21 per cent in the last one year, as gainst a six per cent rise in Sensex.  

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