The brokerage has retained its ‘Buy’ rating on the stock and raised its 12-month target price to ₹168 per share from ₹155, citing strong growth in consumer electronics, continued acquisitions and a robust order pipeline.
At the current market price of around ₹142-₹143, the revised target implies an upside of nearly 18%. Nuvama expects the company to deliver 13% revenue CAGR and 26% earnings CAGR between FY26 and FY28.
Consumer electronics emerges as the biggest growth driver
Analysts at Nuvama are of the view that Samvardhana Motherson’s consumer electronics business is becoming an important contributor to future earnings.
The company has increased its planned investment in the business to ₹8,300 crore, more than three times the earlier plan of ₹2,600 crore, reflecting higher customer demand.
Consumer electronics revenue jumped 7.4 times year-on-year to ₹1,290 crore in FY26, while the business achieved EBITDA profitability for the first time.
A third manufacturing facility, with annual production capacity of 4 crore units, is expected to begin operations in the third quarter of FY27.
According to Nuvama, the consumer electronics business alone contributes ₹18 per share to its revised valuation of the company.
Acquisitions and aerospace add another layer of growth
Apart from consumer electronics, Nuvama expects acquisitions and newer businesses to support earnings growth.
The company has completed the acquisition of Yutaka Giken, while the acquisition of Nexans Autoelectric is expected to be completed during the second quarter of FY27.
These deals expand Motherson’s presence in electric vehicle components, including wiring harnesses, motor assemblies and thermal management systems.
Its aerospace business is also growing rapidly. Revenue from the division increased 40% year-on-year to ₹2,450 crore in FY26, while its order book rose to $1.6 billion, providing revenue visibility over the next five to eight years.
Nuvama expects the company’s emerging businesses, including consumer electronics and aerospace, to deliver 46% revenue CAGR between FY26 and FY28.
Strong order book and balance sheet support expansion
Nuvama said Samvardhana Motherson’s long-term growth outlook is supported by a $96 billion booked business, which offers multi-year revenue visibility across automotive, EV and non-automotive segments.
The brokerage also highlighted that the company’s net debt-to-EBITDA ratio has declined to 0.8x, the lowest level in six years, despite record investments and acquisitions.
The stronger balance sheet gives the company room to pursue additional acquisitions while continuing to invest in high-growth businesses.
