Samvardhana Motherson International Limited (SAMIL), a leading auto component manufacturer, has taken a significant step towards expanding its presence in the clean mobility sector. The company has incorporated a new wholly-owned subsidiary, Motherson Egtronics Electronics Solutions Limited (MEESL), on August 22, 2025, as part of its joint venture agreement with South Korea's Egtronics Co., Ltd.

Joint Venture Details

The incorporation of MEESL follows a Joint Venture Agreement (JVA) between SAMIL and Egtronics Co., Ltd., which was initially disclosed on June 19, 2025. According to the agreement, the equity shareholding of MEESL will be restructured with SAMIL holding a 51% stake and Egtronics Co., Ltd. holding the remaining 49%.

Business Focus

MEESL is set to engage in a range of activities crucial for the clean mobility sector, including:

• Designing and developing clean mobility-related vehicle electronics
• Manufacturing and assembly of key components such as:
  • DC-DC converters
  • Auxiliary inverters
  • Traction inverters
  • On-board chargers
  • Power distribution units

These products will cater to the automobile industry and other sectors, positioning SAMIL at the forefront of the clean mobility revolution.

Financial Details

SAMIL has acquired 100% shareholding in MEESL for an initial paid-up equity share capital of INR 5,00,000, funded through cash consideration. This move demonstrates SAMIL's commitment to investing in future-oriented technologies and expanding its product portfolio.

Regulatory Compliance

The incorporation of MEESL has been duly reported to the National Stock Exchange of India Limited and BSE Limited, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

Strategic Implications

This new venture aligns with the global automotive industry's shift towards clean and sustainable mobility solutions. By partnering with Egtronics Co., Ltd., SAMIL is poised to leverage South Korean expertise in electronics and combine it with its own manufacturing prowess.

The formation of MEESL represents a strategic move by Samvardhana Motherson International Limited to strengthen its position in the evolving automotive landscape, particularly in the realm of electric and hybrid vehicle technologies.

As the automotive industry continues to evolve, SAMIL's latest venture underscores its commitment to innovation and adaptation to market trends, potentially opening new avenues for growth and technological advancement in the clean mobility sector.

Samvardhana Motherson International Limited (SAMIL), a global auto component manufacturer, reported a rise in net debt, reflecting the challenges faced by the automotive industry amid evolving global trade dynamics.

Financial Highlights

• Net Debt Increase: SAMIL's net debt rose to 97.70 billion rupees from 87.13 billion rupees on a quarter-over-quarter basis, marking an increase of approximately 10.57 billion rupees.
• Revenue Growth: The company reported revenues of 30,212 crore rupees, representing a 5% year-over-year growth.
• Profitability Impact: The company experienced a transitory impact on profitability due to industry headwinds and volatility.

Operational Performance

SAMIL demonstrated resilience in its operational performance despite the challenging environment:

• Revenue outpaced industry growth, contributed by well-executed M&As and resilient organic business.
• The company's diversified business model showed strength in navigating the complex global automotive landscape.

Challenges and Mitigating Strategies

Several factors contributed to the increase in net debt and pressure on profitability:

1. Structural Challenges: The company faced headwinds in Western and Central Europe, necessitating cost optimization measures.
2. Tariff-Related Issues: There was a timing lag in passing through tariff-related costs, impacting profitability.
3. Foreign Exchange Volatility: FX fluctuations led to losses of approximately 93 crore rupees (post-tax ~70 crore rupees).
4. Startup Costs: New greenfield projects, particularly in non-automotive businesses, incurred startup expenses.

To address these challenges, SAMIL is implementing several strategies:

• Targeted measures for cost block optimization in Western and Central Europe.
• Engaging with customers to minimize future impact of FX volatility.
• Leveraging its globally local presence to navigate evolving trade policies.

Growth Initiatives

Despite the headwinds, SAMIL continues to focus on growth:

• Three new greenfields were operationalized during the quarter, with 11 more at various stages of completion.
• The company announced two new strategic partnerships in line with its strategy to increase content per car.

Management Commentary

Vivek Chaand Sehgal, Chairman of Motherson, stated, "Motherson has once again demonstrated its resilience and disciplined execution despite persistent industry headwinds and a dynamic global environment. Our performance reflects the strength of our diversified business model and the operational efficiencies across our businesses."

Outlook

While uncertainties in the business environment persist, SAMIL remains well-positioned to navigate the challenges:

• The company maintains a comfortable leverage ratio of 1.1x, enabling both organic and inorganic growth opportunities.
• SAMIL's globally local strategy and strong customer relationships are expected to help in pain-sharing arrangements, albeit with a lead-lag effect.

As the automotive industry continues to evolve, Samvardhana Motherson International Limited appears focused on maintaining its growth trajectory while addressing the immediate challenges posed by the global economic environment.