High depreciation, interest costs dent PAT

Company
11 Mar 2024
5 Min read 
  • Samvardhana Motherson (MOTHERSO) reported in-line operating performance in 3QFY24.
  •  Higher depreciation and interest costs decreased overall PAT.
  •  FY24E/FY25E EPS reduced by 17%/4% due to higher costs from recent acquisitions.
  •  Stock trades at reasonable valuations of 29.9x/21.3x FY24E/FY25E consolidated EPS.
  •  Maintain BUY rating with a TP of INR130, based on Mar26E SoTP.
  •  Recent acquisitions expected to yield EUR1.2-1.3b in revenues in FY25.
  •  Depreciation costs expected to remain high for the next 3-4 years due to acquisitions.
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