Buy Samvardhana Motherson International; target of Rs 94: Emkay Global Financial

Emkay Global Financial is bullish on Samvardhana Motherson International has recommended buy rating on the stock with a target price of Rs 94 in its research report dated November 11, 2022.

Emkay Global Financial’s research report on Samvardhana Motherson International

For Q2FY23, consolidated revenue grew by 27% yoy to Rs182.6bn, marginally above our estimates. Consolidated EBITDA grew by 30% yoy to Rs14bn, 27% above estimates, due to cost savings and partial cost pass-throughs. As the remaining cost pass-throughs are achieved, management expects further margin improvement. We expect a 12% revenue CAGR over FY22-25E, driven by industry upcycle across regions and better wallet share due to premiumization/ electrification. We expect EBITDA margin to expand from 7% in FY22 to 9.8% in FY25E driven by better scale, improved net pricing, and cost savings.

Outlook

We retain Buy with an SOTP-based TP of Rs94 (Rs90 earlier), based on Dec-24E estimates (Sep-24E earlier). Our target P/E multiples for the standalone operations stand at 30x, Motherson Wiring at 35x, and SMR PBV at 15x, based on DCF valuation. Key downside risks: Demand contraction in target markets, weak performance of large clients, and adverse commodity/currency rates.

News Source Link

#modernbusinessnetwork #modernbusinessindia #modernglobalnews #modernglobalbusiness #modernbusinessaward #Enterpreneurship #Startup #Enterpreneurlife #Smallbusinessowner #Sales #smallbusiness #supportsmallbusiness #handmade #shoplocal #shopsmall #investing #wealth #money