Samvardhana's Bet On Premium Products, EVs Pays Off

With a large portfolio and an acquisition spree, the Motherson Group firm is on a high.

- ASTHA ORIEL

#36 LARGEST AUTO ANCILLARY

SAMVARDHANA MOTHERSON

THE GLOBAL AUTOMOTIVE industry has been grappling with macroeconomic headwinds and supply chain constraints owing to the pandemic and high inflation in recent years. While original equipment manufacturers (OEMs) struggled to meet pent-up demand, auto component companies were hit by the semiconductor crisis. Yet, in the past few quarters, auto ancillaries have taken a big leap as the industry moves towards premiumisation and electrification.

It's then no surprise that 80% revenues of Samvardhana Motherson, a wholly-owned subsidiary of Samvardhana Motherson Automotive Systems Group B.V, for the quarter ended September 30, 2023, came from the company's global business. Spanning 41 countries, the Noida-based Tier-I auto component and wiring company is a supplier to OEMs globally. With Daimler and Audi as primary customers, it has 350 manufacturing capacities across geographies. While Samvardhana currently leads India's auto component market, its hyper-localised operations give it an edge over other auto ancillaries.

In FY23, Samvardhana Motherson's total income rose 23% year-on-year to ₹79,281 crore, while net profit went up 71% to ₹1,496 crore.

With supply chain situation easing out, Samvardhana will precede its peers, according to analysts. "In terms of supply and demand situation, the Motherson Group could be one of the big winners because of the larger portfolio in their basket, especially on the premium side," says Saji John, research analyst, Geojit Group.

As the automotive industry shifts gears from internal combustion engine (ICE) to electric vehicles (EVs), the company is expanding presence in the EV segment. As of September 30, 2023, EVs contributed 22% to its product portfolio.