Samvardhana Motherson International Limited (SAMIL), a leading auto component manufacturer, has successfully completed the formation of its joint venture with South Korea's Egtronics Co., Ltd. The company announced the completion on January 07, 2026, marking a significant milestone in its expansion into the clean mobility electronics sector.

Joint Venture Completion

The joint venture formation was completed following the fulfillment of all conditions precedent, as disclosed in the company's regulatory filing. This development follows the initial Joint Venture Agreement (JVA) execution disclosed on June 19, 2025, and the subsequent incorporation of the wholly-owned subsidiary on August 22, 2025.

Shareholding Structure

Post completion of the transaction, the equity shareholding of Motherson Egtronics Electronics Solutions Limited (MEESL) has been restructured as planned. SAMIL now holds 51% stake along with nominee shareholders, while Egtronics Co., Ltd. holds the remaining 49% stake, establishing the strategic partnership between the Indian auto component giant and the South Korean electronics specialist.

Business Operations and Product Portfolio

MEESL is positioned to engage in comprehensive clean mobility solutions, focusing on the design, development, manufacture, and assembly of vehicle electronics. The joint venture's product portfolio encompasses critical components for the evolving automotive industry.

Financial Investment

SAMIL had initially acquired 100% shareholding in MEESL for a paid-up equity share capital of INR 5.00 lakh through cash consideration. The completion of the joint venture now establishes the planned equity structure with Egtronics as the strategic partner.

Regulatory Compliance

The joint venture completion has been reported to both the National Stock Exchange of India Limited and BSE Limited under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has maintained full regulatory compliance throughout the joint venture formation process.

Strategic Market Position

This completed joint venture positions SAMIL strategically in the clean mobility electronics sector, combining its manufacturing expertise with Egtronics' South Korean technology capabilities. The partnership addresses the growing demand for electric and hybrid vehicle components, aligning with global automotive industry trends toward sustainable mobility solutions.

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.