The company is setting up 18 greenfields in the coming years, and about 70% of the capex is for greenfields in non-auto segments
01 Jun 2024 | 19468 Views | By Shruti Mishra
Samvardhana Motherson International (SAMIL), a specialised automotive component manufacturer has lined up Rs 5,000 crore capex for various initiatives, including the setting up of greenfield facilities for the current financial year, according to a senior company official.
Of this, the Noida-based company will invest Rs 2,000 crore in setting ...
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Samvardhana Motherson International (SAMIL), a specialised automotive component manufacturer has lined up Rs 5,000 crore capex for various initiatives, including the setting up of greenfield facilities for the current financial year, according to a senior company official.
Of this, the Noida-based company will invest Rs 2,000 crore in setting up six new greenfield facilities across India, China, and Poland. The capex spent by the auto parts giant stood at Rs 4,000 crore in FY24. According to Laksh Vaaman Sehgal, Director, SAMIL, a large part of this growth capex was spent in emerging economies across auto and non-auto businesses and will continue to be a focus area in FY25.
“Our company is well-positioned to benefit from the tailwinds of emerging markets. We are adding six new greenfields across India, China, and Poland this year. This is over and above the 12 that we had already announced earlier. We will be investing Rs 2,000 crore in FY25 70% of this capex will go towards non-automotive greenfields. Overall, the company is planning to invest Rs 5,000 crore in FY25,” Sehgal said on a quarterly conference call. He also mentioned that these greenfield projects will be coming in at different points in time and will roughly take 16–18 months.
Notably, the company is in the midst of setting up 18 greenfields (13 in India, 4 in China, and 1 in Poland) in the coming years, and about 70% of the capex is for greenfields in non-auto segments.
In the last year, the auto parts behemoth has made 16 acquisitions in the areas of automotive, aerospace, health, and medical. The company management indicated that the P&L (profit and loss) impact of Yachio, Lumen, and ADI acquisitions will start reflecting in the first quarter of FY25. These acquisitions are expected to contribute an additional Rs 14,400 crore in net revenue in FY25.
“If acquisition process flow remains on track, our net revenue would cross Rs 1.13 lakh crore in the current financial year as compared to Rs 98,700 crore in FY24,” Sehgal highlighted.
Given its well-diversified presence across components, geographies, and customers, SAMIL is emerging as the key beneficiary of the growing popularity of EVs and the rising trend of premiumization across segments. This is evident in a significant ramp-up in its order book, with its booked business scaling up to USD 84 billion. Out of this, about 23% came from EVs. This does not include the order book of Yachio and the non-auto business.
In an investor presentation, the company showed its leverage reduced to 1.4 times by the end of the financial year 2024 as opposed to 1.7 times in December, and gross debt came down by about Rs 1,800 crore.
Maintaining a positive view on the company, brokerage firm Motilal Oswal said in a recent report “Given its well-diversified presence across components, geographies, and customers, SAMIL is emerging as the key beneficiary of the growing popularity of EVs and the rising trend of premiumization across segments. This is evident in a significant ramp-up in its order book, with its booked business scaling up to USD 84 billion.”
Additionally, the company plans to raise up to Rs 5,000 crore via the private placement of non-convertible debentures in one or more tranches. The face value of the bonds will be Rs 1 lakh each.