MOTHERSON - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.1

📊 Samvardhana Motherson International Ltd (MOTHERSON) — Long-Term Investment Analysis

Motherson is a well-diversified auto ancillary giant with global operations, strong fundamentals, and a history of strategic acquisitions. It’s a solid candidate for long-term investment, especially for investors seeking exposure to the automotive value chain and electrification trends.

🔍 Key Financial Metrics

Metric Value Interpretation

P/E Ratio 28.4 Fairly valued vs. industry PE (31.2)

PEG Ratio 0.46 Undervalued relative to growth

ROE / ROCE 12.5% / 13.9% Efficient capital use

Dividend Yield 0.55% Low but consistent

Debt-to-Equity 0.49 Healthy leverage

Book Value ₹33.0 P/B ~3.1 — slightly premium

EPS ₹3.60 Positive and growing

Qtr Profit Var -23.4% One-off dip, not a trend

📈 Technical & Trend Indicators

Current Price: ₹103

DMA50 / DMA200: ₹100 / ₹99.2 — bullish crossover

RSI: 53 — neutral zone, no overbought signal

MACD: 0.01 — flat, awaiting momentum

Volume: Below weekly average — low conviction move

📌 Ideal Entry Price Zone

Accumulation Zone: ₹90–₹98

Near DMA200 and historical support

PEG ratio supports growth at reasonable price

Entry below ₹100 offers margin of safety

🧭 If You Already Hold MOTHERSON

🕒 Holding Strategy

Time Horizon: 3–5 years minimum

Catalysts

EV transition and premiumization

Global OEM partnerships

Inorganic growth via acquisitions

Diversification into aerospace and electronics

🚪 Exit Strategy

Partial Profit Booking: Near ₹140–₹145 (52W high)

Stop-Loss: ₹85 (below 52W support)

Re-evaluate: If ROE drops below 10% or debt spikes above 0.8x

🧠 Final Verdict

Motherson is a high-quality compounder with global scale, strong ROE, and a PEG ratio that suggests undervaluation relative to growth. While short-term profit volatility exists, the long-term trajectory remains intact. It’s a buy-on-dips candidate for investors with a multi-year view.

Would you like a comparison with other auto ancillary players like Bosch or Sundram Fasteners to see how Motherson stacks up?

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