This article first appeared on GuruFocus .
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Revenue:30,173 crores for Q2 FY26.
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EBITDA:2,719 crores for Q2 FY26.
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Normalized PAT:856 crores for Q2 FY26.
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Revenue Growth:8.5% year-on-year increase.
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Polymer Business Profitability:Improved from 6.4% to 7.4% sequentially.
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Provisions:36 crores booked as an exceptional item in Q2, in addition to 136 crores in Q1.
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CapEx:Approximately 2,600 crores spent in the first half of FY26.
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Leverage Ratio:1.1x net effective debt to EBITDA, expected to reduce to 0.9x by year-end.
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ROCE:14.2% as of September 2025.
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Consumer Electronics Revenue Growth:36% increase over Q1 FY26.
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Aerospace Revenue Growth:37% year-on-year increase in the first half of FY26.
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Book Business:87.2 billion as of September 2025.
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Warning! GuruFocus has detected 6 Warning Sign with BOM:517334.
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Release Date: November 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Samvardhana Motherson International Ltd ( BOM:517334 ) reported a strong performance with revenues of 30,173 crores, EBITDA of 2,719 crores, and a normalized PAT of 856 crores.
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The company achieved an 8.5% year-on-year revenue growth, outperforming the industry.
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The aerospace and consumer electronics businesses are showing strong momentum, with the aerospace segment delivering a 37% revenue growth in the first half of FY26.
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The company's order book stands at 87.2 billion, indicating strong future business prospects.
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The company is investing in growth, with two new greenfield projects operationalized and ten more in progress, expected to come on stream by FY27.
Negative Points
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The company faced $10 million in tariff-related costs impacting the P&L, which are expected to flow with a lead-lag effect.
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There were provisions of approximately 36 crores booked as an exceptional item during the quarter.
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The global light vehicles industry grew by only 3% year-on-year, with Europe remaining broadly stable and North America witnessing modest gains.
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The company's leverage remains stable at 1.1x net effective debt to EBITDA, with expectations to reduce it to 0.9 by year-end.
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The company's ROCE was impacted, standing at 14.2% at the end of September 2025, due to transitional impacts on profitability and inflated working capital.
Q & A Highlights
Q: Can you provide insights into the progress and future plans for the modules and polymer division? A: Laksh Vaaman Sehgal, Director, explained that the division has undergone significant transformation, including management changes and operational restructuring. The focus has been on improving efficiency and integrating acquisitions like Doctor Schneider. Approximately 75-80% of the transformative work is complete, with ongoing efforts to enhance efficiency and drive synergies.
Q: What is the company's strategy regarding hiring 5,000 engineers and expanding capabilities in AI? A: Laksh Vaaman Sehgal, Director, highlighted the company's focus on automation and software development. The aim is to leverage existing strengths in design and software engineering to enhance operational efficiency and customer response times. The initiative is part of a five-year plan to bolster capabilities and support growth.
Q: How is the order book structured, particularly concerning new and replacement orders, and what is the current EV share in revenue? A: Kunal Malani, CFO, noted that the order book stands at 87.2 billion, with EV revenues currently at 11%. The EV share in the order book has slightly decreased from 24% to 22%, reflecting market dynamics and recalibrated growth expectations.
Q: Can you elaborate on the profitability improvements in the emerging business segment? A: Kunal Malani, CFO, stated that the segment's profitability improved due to the ramp-up of the consumer electronics business and enhancements in the AUI tech business. The company anticipates further improvements as aerospace and other Indian businesses continue to grow.
Q: What are the expectations for the second half of the year in terms of revenue and profitability? A: Laksh Vaaman Sehgal, Director, expressed optimism for the second half, citing operational improvements and new program launches. Despite uncertainties like the Nexperia impact on European OEMs, the company expects stronger quarters ahead, driven by efficient operations and market momentum.
Q: How is the company addressing the $10 million tariff impact? A: Laksh Vaaman Sehgal, Director, explained that the company is in discussions with customers to mitigate the tariff impact. The strategy focuses on local sourcing and production to minimize exposure to such external factors, and efforts are underway to share the burden with customers.
Q: Can you provide more details on the acquisition of Yoteka and its impact on the company's portfolio? A: Laksh Vaaman Sehgal, Director, mentioned that the acquisition is pending closure and is expected to enhance the company's thermal management and rotor state portfolio for hybrid opportunities. The acquisition aligns with the company's strategy to diversify and leverage its global network.
Q: What is the organic growth rate of the company, excluding acquisitions and currency impacts? A: Kunal Malani, CFO, indicated that the organic growth rate is approximately 6%, excluding the impact of the Atsumi acquisition and currency fluctuations. The company has outperformed industry growth despite challenges in the North American commercial vehicle market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
