Auto ancillary stock jumps after acquiring 100% stake in Brazil based Co. for $7.8 million

In Monday’s trading session, the shares of one of the leading Auto Ancillaries stock specialised in manufacturing a wide range of automotive components, including wiring harnesses, polymer products and rearview mirrors. jumps upto 2.7 percent following the acquisition of Baldi Industria E Comercio Ltda.

Price action

With a market capitalization of 1,15,465 Crores on Monday, the shares of Samvardhana Motherson International Ltd jumped upto 2.7 percent after making a high of Rs 168.50 compared to its previous closing price of Rs 164.12.

What happened

Samvardhana Motherson International Ltd has announced the acquisition of 100 percent stake in Baldi Industria E Comercio Ltda, a Brazilian automotive supplier.

The agreement involves a cash payment of BRL 47 million (approximately USD 7.8 million) for the acquisition of 100% ownership of the target company and about BRL 17 million (approximately USD 2.8 million) will be retained to cover any potential indemnification obligations from the seller, for a period of up to five years and the deal is expected to close by Q1FY2026.

This  acquisition will enhance Samvardhana Motherson International Ltd’s operations in South America, focusing on vertical integration, cost optimization, and product alignment with premium vehicle trends.

About the company

Samvardhana Motherson International Limited (SAMIL) is a leading global automotive supplier headquartered in India. It specializes in manufacturing a wide range of automotive components, including wiring harnesses, polymer products, and rearview mirrors.

It supplies wrapping solutions and soft touch surfaces for door panels, IP, steering wheels and other interior components and manufacturing capabilities like PVC, Fabric cutting, sewing and wrapping for door panels, armrests, IP Pads, Steering Wheel and Shift Knob, and Boots.

Samvardhana Motherson International Limited operates through multiple subsidiaries and joint ventures having a strong presence in over 40 countries and serving major automotive OEMs worldwide.

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Business Division Wise Financial Performance (Q2FY24 Vs Q2FY25)

Samvardhana Motherson International Limited showed positive growth across its business divisions. The Wiring Harness division saw a 4% increase, with revenue rising from 7,791 to 8,111 crores, Modules and Polymer Products division experienced a significant 27% growth, with revenue climbing from 11,491 to 14,640 crores.

Followed by,  Vision Systems division recorded a modest 3% gain, growing from 4,689 to 4,807 crores, Integrated Assemblies rose by Rs. 1,651 to Rs. 2,528 and Emerging Businesses division grew from. 2,026 to 2,905 with a 43% increase.

Financials 

The company’s revenue rose by 18.7 percent from Rs 23,639 crore to Rs 28,071 crore in Q2FY24-25. Meanwhile, Net profit rose from Rs 201.55 crores to Rs 879.74 crore during the same period.

Key Financial ratios

Samvardhana Motherson International Limited  has an  Return on Equity (RoE) of 11.61 percent and a Return on Capital Employed (RoCE) of 11.85 percent. Furthermore, the company’s debt-to-equity ratio is 0.78.

Written by Sridhar

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