Samvardhana Motherson's Growth Game: From cars to electronics and aviation

Copyright © HT Digital Streams Limit all rights reserved. Samvardhana Motherson is now a Tier-1 provider to Airbus and Boeing and the only Indian firm that exports components to Japan. (File Photo) Summary to missing income -targets in the past, Wed Samvardhana Motherson is large on air and space travel, consumer electronics and vertical integration to transform growth and profitability by 2030. Samvardhana Motherson International Ltd has elicited its ambitious Vision 2030 at the September 5 analyst. After clocking $ 25.7 billion in FY25 revenue, short of its $ 36 billion goal, the company is now $ 108 billion in revenue and a 40% return on capital (ROCE), of 18.4% in FY25, by the end of the decade. The road map rests on two new growth engines: Consumer electronics and aviation. The expansion of product lines, a steady stream of acquisitions and rising content in both car and non-automotive products is expected to drive the topline. “Samvardhana Motherson has a good record of the set of ambitious five-year goals since 2000. While most of its targets were reached until 2015, it missed both its 2020 and 2025 goals with a margin,” analysts at Motilal Oswal Financial Services. Automotive remains the spine and contributes almost 95% of FY25 income. Here Samvardhana look at white spaces in the global supply chain and deeper relationships with Chinese and Japanese OEMs. More content per vehicle, made possible by new capabilities and vertical integration, is the lever in the short term. The long-term ambition is brave: to mount a complete car by 2030 and capture the entire value chain. The aviation business, launched in FY17, made rapid progress. Samvardhana is now a Tier-1 provider to Airbus and Boeing and the only Indian firm to export aviation components to Japan. With a $ 1 billion order book and a ten -year backlog in demand for aircraft, he prepares to expand to complex congregations and maintenance contracts with a higher margin. In Consumer Electronics, a global order has led to a Mega Chennai facility that is expected to live over 12-18 months. The management is confident that the targeted returns of this business will exceed the current returns of the core business. These non-auto bets are central to Samvardhana’s diversification goal, with no single country, customer or component accounting for more than 10% of the income. On profitability, Samvardhana is engaged in operational efficiency, higher contributions from non-auto, and the reversal of 70 acquired units-which offers an EBIT improvement potential of £ 1.100 crore, against FY25 EBIT of £ 6.384 crore. The other side: Aviation and electronics need heavy pre -investment, long qualifying cycles and dependence on demanding global OEMs. A reliance on acquisition-23 over the past five-year stage has also been integrating risks at capital-heavy businesses. With the missed of the past and the share trading at 20x FY27 estimated earnings, investors will want to see the ambition of performing the execution. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Samvardhana Motherson #Mark To Read The Next Story