Samvardhana Motherson Ltd. is projecting capital expenditure of up to Rs 5,000 crore in FY25 after strong growth in net profit and revenue in the first quarter.
However, this figure needs to be recalibrated on account of acquisition of new businesses, according to Chief Financial Officer Kunal Malani. The company is on a deleveraging path and hopes that the company’s leverage ratio will go down to 1 times, he said.
The company has seen an improvement in margins in the June quarter of FY25, which stood at 9.6%, a 100 bps expansion from 8.6%, Malani said. "Last year’s entire year margin was 9.3% and we are in the first quarter itself sitting on a margin of 9.6%. The total M&A revenue pool that has been assimilated in this quarter is slightly above Rs 6,000 crore,” he said.
The automotive components company's consolidated net profit in Q1 stood at Rs 1,097.18 crore, up over 69% year-on-year. Total revenue from operations increased 28.5% to Rs 28,867.96 crore.
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The performance of the company was good even as the global automotive industry’s growth remained flat, said Chief Operating Officer Pankaj Mittal.
“Performance was really good and it has to be seen in the context that the global automotive industry remained flat. Despite the growth and the large M&A payouts, also doing growth capex, leverage ratio has been maintained at 1.5,” Mittal told NDTV Profit.
Demand is coming in from developing economies, while developed economies are seeing a softening of demand, he said. The softening of demand is because of confusion in the market regarding powertrains. However, the company is ‘powertrain agnostic’ and will cater to all vehicles, he said.
Shares of Samvardhana Motherson closed Wednesday's trade 2.75% higher at Rs 184.85 per share on NSE, compared to a 0.02% rise in the NSE Nifty 50.
Samvardhana Motherson To Acquire Sojitz Corp’s 34% Stake In JV For Rs 237 Crore. Read more on Business News by NDTV Profit.