Samvardhana Motherson reveals robust Q2 FY24 financials, despite production challenges

Samvardhana Motherson International has reported a strong performance for Q2 FY24 today, as the company continues to navigate challenging business conditions. Despite grappling with disruptions due to annual plant shutdowns in Europe and local disturbances across Europe and America, the firm’s revenue reached Rs 23,474 crore, signaling an increase of 28% YoY. The company’s EBITDA also spiked by 31% YoY to INR 1,887 crore from July-September.

Simultaneously, profit-after-tax for the company saw a significant rise of 39% to Rs 451 crore. This growth comes after a recorded 18% YoY consolidated net profit drop to INR 202 crore on Thursday. The company’s shares also experienced a dip of 2.85%, closing at INR 90.20 on NSE.

In addition to its financial growth, Samvardhana Motherson’s order book expanded by 11.43% within six months to Rs 64,130 crore, a substantial part dedicated to electric vehicle components. Electric vehicles accounted for about 22% of the booked business.

The company is further strengthening its future prospects by establishing ten new facilities in India and finalizing four acquisitions: SAS, Saddles, Rollon, and Ichikoh. The integration of these acquired entities is progressing well despite uncertain business environments.

Chairman Vivek Chaand Sehgal acknowledged the unwavering dedication of the team and the ceaseless customer support during tumultuous business conditions. He emphasized that fostering strong relationships and mutual trust with their customers is reflected in their robust order book exceeding US$ 77 billion (Rs 64,130 crore) as of end-September 2023.

InvestingPro Insights

In light of the recent financial report from Samvardhana Motherson International, InvestingPro provides some insightful data and tips. According to real-time data from InvestingPro, the company’s strong earnings have paved the way for continued dividend payments, a streak they’ve maintained for 28 consecutive years. This is a testament to the company’s financial stability and commitment to its shareholders.

Additionally, Samvardhana Motherson International is trading at a low P/E ratio relative to its near-term earnings growth. This may indicate that the stock is undervalued, presenting a potential opportunity for investors. The company’s stock generally trades with low price volatility, which can be appealing to risk-averse investors.

InvestingPro Tips highlight that Samvardhana Motherson International is a prominent player in the Automobile Components industry. This position, combined with the company’s moderate level of debt, makes it a solid investment choice. The company’s performance over the last twelve months has been profitable, and analysts predict this trend will continue.

For those interested in further insights and tips, InvestingPro offers an additional four tips specific to Samvardhana Motherson International. This includes more detailed analysis and projections, available through their premium service.

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