Shares of Samvardhana Motherson International came under pressure following warnings of potential production disruptions from its largest client, Volkswagen AG, and a profit warning from another major client, BMW. The auto parts manufacturer's stock closed 0.5% lower at ₹105.25, reflecting investor concerns over these developments.

Supply Chain Woes for Volkswagen

Volkswagen AG, which contributes 9% to Samvardhana Motherson International's projected revenue for the financial year 2025, has warned of possible production stoppages due to supply chain issues. The root cause of this disruption is a dispute involving Chinese-owned chipmaker Nexperia, which has led to semiconductor supply constraints for European automakers.

Key points of the situation:

• The Dutch government seized control of Nexperia, citing security concerns.
• In response, Beijing restricted chip exports.
• Volkswagen has indicated that while production hasn't been affected yet, short-term disruptions could occur.

BMW's Profit Warning

BMW, accounting for 5% of Samvardhana Motherson International's revenue, has issued a profit warning, further adding to the pressure on the auto parts manufacturer's shares. The German automaker has:

• Reduced its automotive EBIT margin guidance to 5-6% from the previous 5-7%.
• Cut free cash flow projections from over €5 billion to over €2.5 billion.
• Cited weak Chinese sales and higher costs as reasons for the downward revision.

Samvardhana Motherson's Strategic Approach

In light of these challenges, it's worth noting that Samvardhana Motherson International has implemented a strategic mandate as part of its five-year plan. This mandate ensures that no single client exceeds 10% of the company's total revenue, potentially mitigating risks associated with over-reliance on individual customers.

Stock Performance

The recent developments have contributed to a 6% decline in Samvardhana Motherson International's share price over the past month, despite a modest 1.5% gain year-to-date. Investors will likely be watching closely to see how the company navigates these challenges in its key client relationships and the broader auto industry supply chain issues.

Samvardhana Motherson International Limited (SAMIL) has disclosed that its indirect wholly-owned subsidiary in Argentina faces a significant tax penalty. The subsidiary, Motherson SAS Automotive Modules and Services Argentina S.A. (MSAS Argentina), has been fined ARS 56,436,886.20 (approximately INR 3.67 crore) by Argentina's tax authority, Agencia de Recaudacion de Control Aduanero (ARCA).

Penalty Details

The penalty stems from improper VAT input claims and deductions made between 2019 and 2023 against non-compliant supplier invoices. Importantly, these violations occurred before Motherson's acquisition of the business, which was completed on July 31, 2023.

Key Points of the Disclosure

Company's Response

SAMIL states that there is no material impact on the financial or operational activities of MSAS Argentina or the parent company. The company plans to pursue indemnity provisions with the seller, subject to limitation periods.

Additional Corporate Development

In a separate development, SAMIL has announced that its subsidiary, Motherson Technology Services Limited (MTSL), has submitted an application to the National Company Law Tribunal (NCLT) Mumbai Bench. This application, filed on October 15, 2025, seeks approval for a reduction in MTSL's share capital under Section 66 of the Companies Act 2013.

SAMIL currently holds a 92.96% equity stake in MTSL. Upon completion of this share capital reduction scheme, MTSL and its subsidiaries are expected to become wholly-owned subsidiaries of SAMIL.

These developments highlight the ongoing corporate restructuring and regulatory challenges faced by Samvardhana Motherson International Limited as it navigates its global operations and subsidiaries.