(Reuters) -Samvardhana Motherson, India’s biggest auto parts maker by sales, posted first-quarter profit that fell by a third, hurt by weak global demand for cars.
The company’s pre-tax profit declined to 8.84 billion rupees ($101.02 million) in the April-June period from 13.37 billion rupees a year ago.
Net profit fell nearly 50% to 5.12 billion rupees, including a one-time charge of 1.36 billion rupees tied to a restructuring of European operations.
Quarterly revenue rose 4.7% to 302.92 billion rupees, and expenses climbed 6.6% to 294.08 billion rupees.
For further earnings highlights,
KEY CONTEXT
Samvardhana makes wiring harnesses, bumpers and mirrors, and boasts a broad customer base that includes Volkswagen, Mercedes-Benz, Maruti Suzuki and Tesla.
Car sales in top market India dropped 1.4% in the quarter on weak urban demand, while competition from cheaper Chinese models and U.S. trade uncertainties weighed on demand in overseas markets.
The company gets a fifth of its revenues from India, while the U.S., China and Germany account for close to a combined 50%. It has a manufacturing presence in India, Europe, as well as the U.S.
KEY QUOTE
“We are well-positioned to navigate evolving tariffs with the majority of our sales in the US being USMCA (United States-Mexico-Canada Agreement) compliant. For non-USMCA compliant parts, agreements with customers to pass on related costs are in progress.” Chairman Vivek Chaand Sehgal said
Samvardhana shares were trading 4% higher at the day’s high of 94.3 rupees after Sehgal’s comments.
PEER COMPARISON
Estimates (next 12 Analysts’ sentiment
months)
RIC PE EV/EB Revenue Profit Mean # of Stock to Div
ITDA growth growth rating analys price yield
(%) (%) * ts target** (%)
Samvardhana 19.5 8.66 7.84 20.22 Buy 21 0.76 0.63
Motherson 3
International
Ltd
Bosch Ltd 46.9 38.74 8.94 15.59 Hold 4 1.14 1.33
7
UNO Minda Ltd 46.3 25.81 17.36 26.66 Buy 16 0.91 0.21
0
Sona BLW 34.9 20.61 22.01 11.74 Buy 16 0.84 0.73
Precision 7
Forgings Ltd
* The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.5062 Indian rupees
(Reporting by Nandan Mandayam in Bengaluru)
