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Stable performance amid adverse macro

Next five-year revenue aspiration stands at USD108b!

* SAMIL’s 4QFY25 EBITDA margin at 9% was below our estimate of 10% even as PAT came in line with estimates, largely due to a lower tax rate. Organic growth was flat YoY and margins were impacted by tariff-led uncertainties in many regions and start-up costs for greenfields in non-auto.

* Management has alluded to its next five-year revenue growth target of a whopping USD108b (from current USD25.7b). We expect SAMIL to continue to outperform global automobile sales, fueled by rising premiumization and EV transition, a robust order backlog in autos and non-autos, and successful integration of recent acquisitions. While the ongoing tariff issue may lead to some near-term slowdown in some of its key geographies, we expect SAMIL to be the least impacted by these tariffs as it has all its facilities close to its customers. Given the long-term growth opportunities, we reiterate our BUY rating with a TP of INR175, based on 24x FY27E EPS.

Stable performance amid adverse macro

* 4Q operational performance was below our estimates even as PAT came in line with estimates, largely due to a lower tax rate.

* Wiring harness business grew 5% YoY to INR85.9b (est. INR80.7b) and EBITDA margins improved 130bp YoY to 12.4%.

* Modules & Polymer business revenue grew 12% YoY to INR153.6b (est INR152.8b) and EBITDA margins declined 430bp YoY to 6.5% (est. 10.9%). Bulk of this growth was led by acquisitions done last year. Core growth was muted as global OEMs were looking to realign their supply chain given the ongoing tariff-led uncertainty in many regions, which in turn impacted margins.

* Vision system business revenue declined 1% YoY to INR49.7b (est. INR49.6b) and EBITDA margins declined 90bp YoY to 12% (est. 12%).

* Integrated assemblies business revenue remained flat YoY at INR24b. Margins declined 220bp YoY in this division to 10.6% (est. 13.7%). Three Greenfield plants are being set up in emerging markets (China and Mexico) to support new and existing customers.

* Emerging business grew 41% YoY to ~INR32.3b (est INR28.6b). However, EBITDA margins declined 500bp YoY to 12.1%. This was impacted by the addition of AD Industries, which is recovering from losses, and the ramp-up of new facilities in the Aerospace and Consumer Electronics division.

* Overall, adjusted PAT grew 9% YoY to INR10b and was in line with our estimate.

* For FY25, revenue grew 15% YoY to INR1,137b. While organic growth was 8%, the balance was led by integration of acquisitions done in FY24.

* EBITDA margin remained stable YoY at 9.3%.

* Overall, PAT grew 51% YoY to INR38b.

* SAMIL delivered FCF of INR18.5b post capex of INR44.3b in FY25.

Highlights from the management commentary

* Management has indicated its next five-year growth aspiration – to achieve USD108b in revenue (from current USD25.7b).

* SAMIL outpaced industry growth by 15% in FY25, driven by content growth and M&A.

* Management has earmarked a capex of INR60b for FY26, of which 50% would be for organic growth and the balance for maintenance. Almost 70% of the organic growth capex would be invested in non-auto business.

* Management has indicated that the majority of its components are USMCAcompliant and hence it does not see any material financial impact due to the ongoing tariff headwinds.

* In response to the increasing complexity in the global automotive supply chain, regulatory shifts, and broader market volatility, SAMIL has announced a strategic cost optimization initiative aimed at enhancing operational efficiency across its European operations. The measures aim to reduce a cost block of EUR50m per annum once fully implemented over the next three years.

Valuation and view

* Management has alluded to its next five-year revenue growth aspiration, which now stands at a whopping USD108b. We expect SAMIL to continue to outperform global automobile sales, fueled by rising premiumization and EV transition, a robust order backlog in autos and non-autos, and successful integration of recent acquisitions. While the ongoing tariff issue may lead to some near-term slowdown in some of its key geographies, we expect SAMIL to be the least impacted by these tariffs as it has all its facilities close to its customers and can effectively realign supplies as per customer needs. Further, this is likely to lead to industry consolidation, with players like MOTHERSO likely to emerge as key beneficiaries in the long run. Given the long-term growth opportunities, we reiterate our BUY rating with a revised TP of INR175, based on 24x FY27E EPS.

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