Samvardhana Motherson International Limited Q3 FY26 Earnings Call Summary

Summary

Samvardhana Motherson International Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026, 4:00 PM IST

Event Participants

Executives 5 Gandharv Tongia (Group CFO), Laksh Vaaman Sehgal (Director), Pankaj Mital (Whole Time Director and President), Rajat Jain (COO, Vision Systems), Vivek Chaand Sehgal (Chairman)

Analysts 4 Aniket Mhatre (Motilal Oswal), Nitij Mangal (Jefferies), Sajal Kapoor (Antifragile), Siddhartha Bora (Nomura)

Financials & KPIs

Geographic & Segment Commentary

• Modules and Polymer: Significant margin expansion was driven by operational efficiencies and transformative restructuring measures in Western and Central Europe. Management noted that sourcing locally and new program launches helped offset commodity and currency fluctuations.
• Consumer Electronics: Segment recorded 75% QoQ revenue growth as capacity ramps up toward a target of 16 million units by end-FY26. A third plant is scheduled for Q3 FY27 to double current capacity and enable vertical integration.
• Aerospace: Reported over 40% YoY growth with a consistently expanding order book. The division has successfully transitioned to Tier-1 supplier status for major OEMs like Airbus and Boeing, expanding into business jets and rotary-wing aircraft.
• Integrated Assemblies: Marked margin improvement following the full integration of recent acquisitions. The segment is leveraging group manufacturing synergies to shift from pure assembly to higher-value manufacturing support.

Company-Specific & Strategic Commentary

• Greenfield Expansion: The company has 12 Greenfield plants under development across emerging markets, including new facilities in India (Vision Systems) and Morocco (Wiring Harness). Most are expected to be operational by H2 FY27.
• Non-Automotive Diversification: Strategic pivot into Aerospace, Consumer Electronics, and Health/Medical targetting a 40% ROCE. These ventures are customer-led, ensuring de-risked entry through blue-chip partnerships like BIEL and Nexans.
• Acquisition Integration: Nexans Autoelectric (Wiring Harness) and Yutaka Giken acquisitions are on track to close in H1 FY26. The Yutaka tender offer for the 30% public shareholding commenced on February 9, 2026.
• D.E.M.A.L Strategy: Strengthening “Design, Engineering, Manufacturing, Assembly, and Logistics” capabilities to support the Vision 2030 targets and enhance vertical integration.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Restructuring & Margins

• Question: What drove the margin expansion in Modules and Polymers, and is it sustainable? (Nitij Mangal)
• Answer: Benefits stem from streamlining acquisitions and restructuring Western/Central Europe operations. Efficiency gains via AI and robotics are expected to continue. (Laksh Vaaman Sehgal)

New Business Verticals

• Question: How do you create cost/capability synergies in semi-conductors and aerospace? (Sajal Kapoor)
• Answer: Every project is customer-led with a 40% ROCE target. We use the “Motherson DNA” of operational excellence while partnering with technology leaders to de-risk entry. (Laksh Vaaman Sehgal/Vivek Chaand Sehgal)

Consumer Electronics Scale

• Question: What is the current status of the 16 million unit capacity target? (Siddhartha Bora)
• Answer: Current capacity is a “fraction” of the target, with massive ramp-ups planned. The third plant in Q3 FY27 will double current capacity and improve vertical integration. (Laksh Vaaman Sehgal/Gandharv Tongia)

Acquisition & Logistics

• Question: What drove the improvement in Integrated Assemblies? (Aniket Mhatre)
• Answer: Full integration of the business into the group and bringing manufacturing in-house to support what was previously just an assembly operation. (Laksh Vaaman Sehgal)

Key Takeaway

Samvardhana Motherson delivered a record-breaking Q3 FY26, achieving its highest-ever quarterly revenue of ₹31,409 crores (+14% YoY) and a normalized PAT of ₹1,061 crores (+21% YoY). Despite a global slowdown in passenger vehicle production, the company leveraged its diversified footprint and strategic restructuring in Europe to expand margins. The non-automotive segment emerged as a significant growth engine, with Consumer Electronics growing 75% QoQ and Aerospace rising over 40% YoY. Management remains committed to a disciplined capital allocation strategy, maintaining a 1.1x net leverage while investing in 12 Greenfield projects. Looking ahead, the company is optimistic for an even stronger Q4, supported by capacity ramp-ups in electronics and the stabilization of recent acquisitions. Progress toward “Vision 2030” continues with a high-conviction focus on 40% ROCE for new business verticals.