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SAMIL reported a healthy 1Q, with revenue up 17%yoy led by strong growth across segments, particularly wiring harness (27% yoy), MPP (20% yoy), and emerging businesses (31% yoy). EBITDA too rose, 25% yoy, but EBITDAM saw a 230bps qoq decline to 8.8% amid a 60bps gross-margin dip (hit by copper/crude-linked polymer prices; pass-on with a 3-6M lag) and 120bps/50bps higher staff costs/other expenses. SAMIL’s FY27 growth outlook is robust, aided by CV industry demand recovery across markets, healthy and rising orderbook across segments, ramp up of consumer electronics business, and integration of new M&As (Nexans Auto Electrics, Yutaka Giken – a $2bnpa potential on full ramp-up). The 3rd mother plant in consumer electronics to come onstream from 3QFY27, with >2x capacity (41mnpa units) vs 2 smaller greenfields (16-17mnpa units). SAMIL has revised its capex for consumer electronics business to Rs75bn over 2-3Y (~Rs25bn spent so far), indicating strong growth potential here. New businesses (particularly consumer electronics) and 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 raise FY27E/28E EPS by 8-10% and revise up our TP by 20% to Rs180 from Rs150, at 23x Jun-28E PER (rolled forward; 21x earlier) to factor in the major growth potential in consumer electronics and resilient core operations.

In-line operational performance; margins hit by time lag in commodity cost pass-on

Revenue was up 17% yoy, mainly led by wiring harness, emerging businesses, MPP. EBITDA grew 26% yoy; EBTIDAM dipped by 226bps qoq to 8.8%, amid 60bps gross margin contraction and higher other expenses/employee costs. This was led by a 600bps/295bps/240bps qoq dip in EBITDAM of emerging businesses, integrated assemblies, and MPP. PAT was up 46% yoy.

Earning call KTAs

1) Strong momentum in India, combined with recovery in North American CV industry, keeps the FY27 outlook favorable; India remains an outlier and EU product launches should provide support amid the China slowdown.

2) The 3 rd consumer electronics plant is ramping up, adding 40mnpa units capacity (taking total capacity to 56mnpa units) at full ramp-up; total capex is Rs75bn (1/3rd has been spent; balance to be deployed over next 2-3Y.

3) Copper price passthrough, with a lag of 3-6M, should aid margin recovery across segments; the global wiring harness business is less impacted by copper (4% qoq globally vs 7% called out by MSUMI), while India is affected by rupee depreciation.

4) In MPP, headcount reduction and footprint optimization have enabled SAMIL to counter commodity/logistics cost inflation.

5) SAMIL is working with local Chinese OEMs; its global footprint supports SAMIL's presence with Chinese OEMs as they expand their business globally.

6) The Nexans Auto Electrics (wiring harness) and Yutaka Giken (vision systems) acquisitions bring a combined topline of ~$2bn (Rs190bn) at full potential; margins are expected to gradually reach industry standards, though they will be lower at the beginning.

7) Yutaka brings a range of new products; while it will take time to identify synergies, it should create significant cross-selling opportunities and new product capabilities.

8) The newly announced Shenzhen Autocruis (vision systems) acquisition is intended to enhance product capabilities and competitiveness for exterior and interior digital mirrors.

9) 10 of the 13 greenfields are set to come online in FY27 (all in emerging markets).

10) SAMIL aims for some of the new businesses to be independent and self-funded, as they scale up adequately; a separate listing is on the cards (likely to materialize within this 5Y plan)

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