Shares of Samvardhana Motherson International Limited rallied 3.99% to ₹137.18 per share on the National Stock Exchange (NSE) during early trade on Friday, March 28, 2025. The auto ancillary company saw gains after its clarification.
The company issued a statement post-market hours on Thursday, March 27, 2025. It addressed the impact of the 25% tariff on imported cars and certain auto components imposed by US President Donald Trump.
The company clarifies the impact of a 25% tariff
In its statement, Samvardhana Motherson assured that a significant portion of its products supplied to customers in the US are either manufactured domestically or comply with the United States-Mexico-Canada Agreement (USMCA). As per its current assessment, the company does not foresee any material impact on its financials due to the tariff.
However, the company noted that the future impact will depend on various factors, including product inclusions, component specifications, geographical coverage, and tariff modifications that may be announced later.
Market reaction to Trump's tariff announcement
On Thursday, March 27, 2025, the shares of Samvardhana Motherson and other automotive sector companies declined significantly following Trump's announcement. The company derives approximately 20% of its revenue from the US market, making it the second-largest contributor to its earnings after Germany, followed by China and Spain.
Despite the initial drop, the stock rebounded following the company's clarification, presenting a potential opportunity for investors looking to buy shares online.
Samvardhana Motherson Q3 FY25 results
Samvardhana Motherson reported a consolidated net profit of ₹879 crores for the third quarter ending December 31, 2024. This marked a significant increase from ₹542 crores in the same quarter of the previous fiscal year.
According to analysts, the company's profit was below expectations due to weaker global car sales. Samvardhana Motherson, India's largest auto parts manufacturer by market capitalisation, supplies components to major automobile brands, including Maruti Suzuki India Limited, Mercedes-Benz Group AG, VOLKSWAGEN GROUP Common Stock and Bayerische Motoren Werke AG.
The company reported that global car sales declined by approximately 1% during the December quarter. Additionally, its profitability was impacted by a decline in margins within its modules and polymers division, which dropped to 8% from 8.8%.
Samvardhana Motherson generates nearly half of its revenue from components like bumpers, while the remaining revenue comes from wiring harnesses, rearview mirrors and sunroofs.
Stock performance and outlook
At 10:20 AM on Friday, March 28, 2025, Samvardhana Motherson's shares were trading at ₹132.93 per share on the NSE. The stock movement reflects investor sentiment following the company's clarification on the potential impact of Trump's 25% auto tariff.
Samvardhana Motherson shares have gained over 12% in the past year but have declined more than 15% on a Year-to-Date (YTD) basis. Market analysts attribute this to broader industry trends and global economic conditions.
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