Samvardhana Motherson ends FY26 with record revenue and a lower leverage ratio

Samvardhana Motherson International Limited closed FY26 with its highest ever quarterly and annual revenues, while reporting a sharper improvement in quarterly profitability. In Q4 FY26, consolidated revenue rose 17% year-on-year to Rs 34,309 crore, EBITDA increased 42% to Rs 3,805 crore, and normalized profit after tax attributable to shareholders was Rs 1,674 crore, up 66%.

For the full year, consolidated revenue crossed Rs 1.25 lakh crore for the first time. Reported revenue from operations was Rs 1,26,104 crore in FY26, up 11% year-on-year, while EBITDA also rose 11% to Rs 12,033 crore. Normalized PAT for FY26 came in at Rs 4,258 crore, reflecting 17% growth. Management attributed the improvement in PAT to better operating performance and lower finance costs.

The company’s message through the presentation and the earnings call was consistent: a diversified portfolio, disciplined execution, and a balance sheet that retains flexibility even as investments rise. This was delivered despite sharp commodity inflation, especially copper, and a renewed rise in freight and polymer costs influenced by geopolitical tensions.

A year led by execution across divisions

Motherson’s divisional disclosures, presented on an economic revenue basis including joint ventures, show Modules and Polymer Products remained the largest division. In FY26, this division recorded revenue of Rs 62,894 crore with an EBITDA margin of 8.1%, compared with 7.7% in FY25. The improvement was sharper at the quarterly level, where Q4 FY26 margin expanded to 9.2% from 6.5% a year earlier. The company linked this to transformation initiatives and cost optimisation, particularly in Europe.

Wiring Harness revenue rose to Rs 36,508 crore in FY26 from Rs 32,861 crore in FY25, while EBITDA margin moderated to 10.8% from 11.8%. Management stated this was impacted by higher copper prices, especially in the second half, although sequential recovery in Q4 was supported by operating leverage. The company reiterated that raw material pass-through arrangements exist with customers, but the settlement can lag by one or two quarters.

Vision Systems remained resilient despite a weak market environment, with FY26 revenue increasing to Rs 21,001 crore from Rs 19,506 crore. The company emphasised a focus on increasing content per vehicle, building premium order wins, and continuing operational efficiency initiatives.

Integrated Assemblies stood out on profitability, with FY26 EBITDA margin improving to 13.6% from 11.5%. In Q4 FY26, the margin reached 15.6%. Management discussed how the integration of acquisitions and leveraging the broader Motherson ecosystem supported this performance, while also pointing to a stronger pipeline of program launches in FY27.

Financial summary

Note: Normalized PAT adjusts for exceptional items disclosed by the company.

Emerging businesses begin to matter more

The clearest shift in FY26 was the scale-up in emerging businesses. On the company’s divisional reporting basis including JVs, emerging businesses revenue increased to Rs 17,072 crore from Rs 11,418 crore. This expansion is broad-based within the sub-divisions.

Lighting and Electronics reported FY26 revenue of Rs 5,663 crore and EBITDA of Rs 918 crore. Precision Metals and Modules recorded revenue of Rs 5,269 crore and EBITDA of Rs 484 crore, with management attributing a large part of this growth to the Atsumitec integration. Aerospace reported revenue of Rs 2,447 crore and EBITDA of Rs 203 crore.

Consumer electronics, which management discussed within the lighting and electronics platform, was a key highlight. The company stated revenue increased 7.5 times year-on-year in FY26, and the business achieved EBITDA profitability for the year. Management said Q4 revenue grew about 46% quarter-on-quarter as the second facility became operational in Q3 FY26. The company also stated that it achieved production run rates in Q4 aligned with its targeted annual production guidance of 14 million to 16 million units.

The next phase of scale is expected to come from a third consumer electronics facility, which management said is on track for commissioning in Q3 FY27 and will include upstream integration capabilities. Management avoided revenue per unit guidance, and also noted that some customer names cannot be disclosed and therefore may not appear in the disclosed top-20 customer list.

Aerospace continues to show multi-year momentum. Management stated the aerospace business has delivered about 10 times topline expansion over the past three years and reported a disclosed order book of USD 1.6 billion. The company indicated aerospace orders typically span about five to eight years, and two new aerospace facilities in India are expected to start production in Q1 FY27.

Order book, capex, and balance sheet discipline

The company disclosed booked business of USD 96 billion as of March 31, 2026. The booked business mix was presented as 75% automotive, 22% automotive EV, and 3% non-automotive. Management highlighted diversification across segments, with 37% of booked business in Modules and Polymer Products, 26% in wiring harness, 19% in vision systems, 8% in integrated assemblies, and 10% in emerging businesses. Geographically, the booked business was spread across Europe (35%), North America (22%), India (24%), China (9%), and rest of world (10%).

Capex was another major thread. FY26 capex was Rs 5,911 crore, representing 49% of EBITDA, and management stated this was in line with prior guidance. For FY27, the company guided capex of around Rs 6,000 crore plus or minus 10%, with roughly half directed to growth capex and half to regular capex. The presentation also stated that about 60% of FY27 capex is expected to be on non-auto businesses.

The company also shared a detailed pipeline of capacity expansion. It listed 16 facilities at different stages of completion, with start of production milestones ranging from Q1 FY27 to Q1 FY28. Management stated that 13 of these facilities are scheduled to come on stream during FY27, and that all ongoing expansions are located in emerging markets.

Despite high capex, leverage continued to improve. The leverage ratio declined to 0.8 times as of March 31, 2026, compared with 0.9 times a year earlier, marking the lowest level in the company’s history according to management. The company disclosed gross debt of Rs 15,895 crore and liquidity of Rs 14,759 crore as of March 31, 2026. It also provided a maturity profile and noted that Rs 1,500 crore of compulsorily convertible debentures are assumed as equity and excluded from the debt stack in its maturity chart.

Management also commented on interest rate exposure, stating the company has a diversified mix of fixed and floating debt, providing partial protection from yield spikes.

Shareholder payout and exceptional items

The board recommended a final dividend of Rs 0.25 per equity share for FY26, subject to shareholder approval at the AGM scheduled for July 30, 2026. The record date for the final dividend is July 14, 2026. The final dividend is in addition to an interim dividend of Rs 0.35 per share, taking the total FY26 dividend to Rs 0.60 per share.

Management stated the FY26 dividend payout ratio is proposed at 16.4%, up about 1 percentage point from the prior year, and reiterated the company’s Vision 2030 aspiration of progressively moving toward a higher payout ratio.

The company also clarified that reported PAT includes adjustments related to transformative measures in Central and Western Europe, the new labor code impact, and accelerated amortization of certain intangible assets. In Q4 FY26, management referenced a post-tax exceptional adjustment of Rs 177 crore related to Europe transformation measures.

Takeaways

FY26 reinforced Motherson’s positioning as a diversified global supplier with increasing exposure to higher growth adjacencies. The core automotive divisions delivered record revenues, while margin recovery was visible in Modules and Polymer Products and in Integrated Assemblies. Emerging businesses scaled rapidly, supported by consumer electronics and aerospace momentum.

At the same time, management did not downplay the operating backdrop. Copper inflation, polymer price increases, and freight volatility remain live variables, and pass-throughs can carry timing lags. Europe also remains an area where restructuring actions continue.

The headline for investors is that the company paired record revenue with a leverage ratio of 0.8 times and reiterated FY27 capex plans while keeping liquidity comfortable. The next year’s execution will be watched closely for the ramp-up of new facilities, especially the third consumer electronics plant in Q3 FY27, and for the closure and integration of announced transactions such as the Nexans automotive harness business.