Synopsis:
Samvardhana Motherson shares fell nearly 3 percent after BMW cut its 2025 forecast, citing weaker China sales, higher tariffs, and dealer support costs, delaying duty reimbursements and facing rising competition from local EV makers.
During Wednesday’s trading session, shares of one of the world’s largest and fastest growing suppliers for Original Equipment Manufacturers (OEMs) in the automotive industry tumbled nearly 3 percent on the stock exchanges, following BMW’s revision of its forecast due to softer sales in China and rising tariff costs.
With a market cap of Rs. 1.07 lakh crores, shares of Samvardhana Motherson International Limited closed in the red at Rs. 101.5 on BSE, down by around 2.5 percent, as against its previous closing price of Rs. 104.1. The stock has delivered negative returns of over 25 percent in one year, but has gained by around 3 percent in the last one month.
What’s the News
Shares of Samvardhana Motherson International Limited declined by nearly 3 percent following a profit warning from BMW, one of its key clients, contributing about 5 percent of its revenue.
BMW revised down its volume outlook for the Chinese market in the December quarter and now forecasts an automotive EBIT margin of 5-6 percent for 2025, lower than its earlier estimate of 5-7 percent. The company also reduced its automotive free cash flow forecast from above €5 billion to over €2.5 billion. These adjustments reflect softer sales in China, increased tariff costs, and dealer support payments due to reduced commissions on local financial products.
BMW further announced a delay in receiving customs duty reimbursements from US and German authorities, amounting to a substantial three-digit million figure, which has been postponed from 2025 to the following year.
Additionally, domestic electric vehicle (EV) manufacturers such as BYD and Xiaomi are increasing competition in China, challenging Western automakers like BMW, Audi, and Porsche, and contributing to a decline in their vehicle sales.
Meanwhile, BMW shares fell as much as 5.4 percent in Frankfurt after the company stated it now expects pre-tax group earnings in 2025 to be slightly lower than in 2024, revising down from an earlier projection of steady results.
Financials & More
Samvardhana Motherson reported a marginal growth in its revenue from operations, showing a year-on-year increase of around 5 percent from Rs. 28,868 crores in Q1 FY25 to Rs. 30,212 crores in Q1 FY26. In contrast, its net profit decreased during the same period from Rs. 1,097 crores to Rs. 606 crores, representing a decline of around 45 percent YoY.
Samvardhana Motherson International Limited, formerly known as Motherson Sumi Systems Limited, was established in 1986 as a joint venture with Sumitomo Wiring Systems, Japan, and initially focused on manufacturing integrated wiring harnesses and related components.
The company is a full system solutions provider and has a diversified product portfolio which includes electrical distribution systems, fully assembled vehicle interior and exterior modules, automotive rear vision systems, molded plastic parts and assemblies, injection molding tools, molded and extruded rubber components, lighting systems, electronics, precision metals and modules, Samvardhana Mothersonndustrial IT solutions and services and new innovative technologies such as telematics etc.
Written by Shivani Singh
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