Samvardh. Mothe. (MOTHERSON)

FairStock Score: 61/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Five-year revenue CAGR of 14.65% with latest quarterly sales of ₹31,409 crore shows meaningful scale and growth.
• Piotroski F-score of 8/9 and Altman Z-Score of 3.00 indicate sound near-term financial health.
• Positive free cash flow of ₹1,450 crore and modest debt/equity of 0.53 provide some balance sheet comfort.
• Promoter holding of 48.60% aligns interests with minority shareholders.

Concerns

• Profit growth is down 23.72%, while P/E is 39.92 and EV/EBITDA is 78.42, leaving no room for error.
• Current price of ₹127.22 is far above Graham Number of ₹49.61 and DCF intrinsic value of ₹52.04, implying negative margin of safety of -168.77%.
• ROE of only 9.79% does not justify a price-to-book of 3.85.
• Dividend yield of just 0.42% offers negligible income support.

AI Analysis

Samvardhana Motherson is clearly a large, globally integrated auto components player, but as value investors we must discipline ourselves with numbers, not narratives. The company has grown revenues at 14.65% CAGR over five years, and latest quarterly sales are ₹31,409 crore, so the scale is real. The balance sheet is reasonably sound: debt/equity at 0.53, Altman Z at 3.00, and Piotroski F-score of 8/9 suggests healthy recent financial signals. Free cash flow of ₹1,450 crore is positive, but modest relative to a market cap of ₹1.41 lakh crore. The moat appears moderate; auto component supply relationships create switching costs, but capital intensity and customer concentration limit pricing power. The worries are hard to ignore. Profit growth is down 23.72%, while the stock trades at P/E of 39.92 and P/B of 3.85. EV/EBITDA is extraordinarily high at 78.42. Graham Number is ₹49.61, and DCF intrinsic value is ₹52.04, both far below the current price of ₹127.22. Margin of safety is negative 168.77%. Return on equity is only 9.79% despite a 3.85 times book value multiple; that combination can be dangerous. Dividend yield is negligible at 0.42%. In Graham's language, price is what you pay, value is what you get. Here the market is paying for future auto recovery and content growth, but I need a margin of safety. This looks like a well-managed cyclical company, not a compounder at this price. I would keep it on watch, not buy at this valuation.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer