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SAMIL clocked a strong Q4, with revenue up 17% led by broad-based growth across segments. EBITDA grew 43% YoY, with EBTIDAM expanding by 130bps QoQ to 11% on strong operating leverage, partially offset by a 40bps QoQ gross margin dip. SAMIL’s FY27 growth outlook is robust, aided by anticipated CV demand recovery across markets, healthy and rising orderbook across segments, ramp up of the consumer electronics business, and integration of new M&As (Atsumitec, Nexans). Commodity costs are a complete pass-through to customers, albeit with a 1-2 quarter lag; SAMIL is also in active negotiations to pass on other costs like those related to overheads, energy, and logistics, to protect margins. The 3rd mother plant in consumer electronics would come onstream from Q3FY27, with volumes of the 2 smaller greenfields expected to be multifold. Restructuring initiatives in EU (MPP) have driven a hefty 270bps YoY margin rise, with further headroom for improvement. The aerospace orderbook is seeing consistent growth (up 20% YoY in FY26), on new product launches. SAMIL is developing capabilities in the semiconductor space by leveraging complementary strengths gained in the aerospace business. We raise FY28E EPS by 5% to factor in a better growth outlook for SAMIL in the current dynamic environment. New businesses (particularly consumer electronics) and a renewed India focus (all new plants are in India/emerging markets) are expected to drive the next leg of growth (refer to Vision 2030: Consumer electronics a major lever for growth). We retain BUY and raise our TP by ~7% to Rs150 from Rs140, at 20x FY28E PER.

Broad-based revenue growth with sequential margin expansion

Revenue was up 17%, led by broad-based growth across segments. EBITDA grew 43%. EBTIDAM expanded by 130bps QoQ to 11%, led by strong operating leverage and partially offset by 40bps QoQ gross margin contraction. Adjusted PAT was up 61% YoY.

Earnings Call KTAs

1) SAMIL logged a strong Q4 in a dynamic environment, led by robust growth across geographies/segments and aided by integration of Atsumitec. EBITDA improvement was driven by margin rise in MPP/emerging businesses, particularly Lighting & Electronics and Aerospace.

2) 16 greenfields are under development across emerging markets, to support growth in automotive/non-automotive segments; of these, 13 greenfields are expected to come onstream in FY27, aiding growth in FY27-28.

3) SAMIL has LT supply arrangements and commodities are a pass-through albeit with a 1-2Q lag.

4) The Nexans acquisition, expected to close by end-June/early-July, will significantly enhance PV/CV wiring harness capabilities, deepen OEM relations, and unlock meaningful cross-selling prospects.

5) SAMIL is engine-agnostic, capable of supporting EV/non-EV powertrains, with the business being largely powertrain-agnostic. ‘Only-EV’ customers are now expanding across all powertrain types; SAMIL is well-placed to supply components across all powertrains.

6) The 3rd (and the biggest) greenfield for consumer electronics business is set to come onstream from Q3FY27, and drive significant growth in the segment (volume from the plant expected to be multifold vs combined output of the 2 smaller greenfields).

7) In Aerospace, India's order book now exceeds EU’s, with significant scope for growth and margin expansion as customers build India presence. Capabilities in Aerospace open a natural pathway into semiconductors, given the complementary nature. More meaningful M&A/growth would follow, with India firmly at the center.

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