Samvardhana Motherson Q2 Results: A miss on all fronts despite profit nearly doubling from last year

Samvardhana Motherson Ltd., the auto component manufacturer reported its September quarter results on Tuesday, November 12, where most of the parameters were a miss on expectations.

Net profit for the quarter nearly doubled from the year-ago quarter, increasing by 95% to ₹880 crore. The company had reported a net profit of ₹451 crore last year. The profit figure was below the CNBC-TV18 poll estimate of ₹910 crore.

Revenue for the quarter increased by 19% to ₹27,812 crore, which was below expectations of ₹28,334 crore.

Samvardhana Motherson's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹2,449 crore, a growth of 27% from last year's figure of ₹1,934 crore and still below the estimates of ₹2,691 crore.

EBITDA margin for the quarter increased by 8.8% from 8.2% during the same period last year, and below the estimates of 9.5%.

The management said that the current leverage ratio positions the company well for sustainable growth. While the automotive booked business stood at nearly $88 billion, the non-automotive business is also growing consistently.

Leverage ratio for the company came down to 1x from 1.5x earlier.

Five out of the 19 planned greenfield facilities have come on stream, according to Samvardhana Motherson, while eight more facilities are likely to be operationalised by the second half of the current financial year.

At the end of the September quarter, Samvardhana Motherson's Return on Capital Employed (RoCE) stood at 17.3% from 16.9% during the same period last year.

Shares of Samvardhana Motherson fell as much as 5% post the earnings announcement and are currently trading 4.3% lower at ₹167.24. The stock has corrected 25% from its recent peak of ₹217.