Motherson eyes bigger India play with global technologies amid auto sector shift

New Delhi: Auto components major Samvardhana Motherson International Ltd (SAMIL) aims to leverage technologies acquired through its global expansion to tap emerging opportunities in India's automotive market, as higher product standards and the shift to stricter emission norms drive demand for advanced solutions.

The strategy is part of its broader Vision 2030 ambition to achieve USD 108 billion in topline gross revenue by 2029-30.

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In an interview with PTI, Pankaj Mital, Whole-time Director and President, and Gandharv Tongia, Group Chief Financial Officer, outlined the company's growth priorities, including bringing globally acquired technologies to India, expanding its presence across business segments and geographies, and strengthening its customer relationships.

"We believe that India's growth will also benefit us significantly, particularly because we now own many technologies. The quality of products being manufactured and consumed in India is improving, and the country is also moving towards the latest emission norms," Mital said.

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"With the acquisitions we have made, we have gained access to new technologies. We are delivering solutions that meet the standards of the best in the world, and these technologies are now part of our portfolio. We can therefore bring them to India and provide the best solutions to the market," he added.

On the domestic growth outlook, Tongia said India's automotive industry had maintained double-digit growth since the GST relaxation and the company expected the broader momentum to continue.

"India, as you know, the growth rate of our industry has been in double digits since the time the GST relaxation was done. By and large, we anticipate that the industry will continue to grow. It's possible that a quarter here and there might impact the performance, but structurally India is a consumption powerhouse and we anticipate that the growth level continues in India in times to come," Tongia said.

He also said Motherson had a strong balance sheet and order book, supported by both organic and inorganic business additions, as it works towards its longer-term revenue ambition.

"We are targeting a topline gross revenue of USD 108 billion in 2030. As mentioned, our balance sheet is very strong. We have a very strong order book organically as well as inorganically. We will continue to meet and exceed customer expectations and we are optimistic on our outlook," Tongia said.

Mital said the company's acquisition strategy would continue to be driven by customer requirements, with joint ventures and acquisitions considered when customers need solutions that the group cannot provide independently.

"For us, the key consideration has always been what the customer wants. If our customers require solutions that we cannot provide on our own, we look at joint ventures or acquisitions to address those needs. Most of our acquisitions have been customer-led," he said.

"Whether the requirement is in technology, in an area where we already operate, or in a completely new domain, you will not find us lacking in our efforts to find solutions for our customers," he added.

The group is also seeking to reduce its exposure to demand fluctuations in individual markets through diversification across automotive segments, geographies and newer verticals, while increasing its content per vehicle and adding new customers.

"When we look at demand, we are well diversified and continue to add more segments to our portfolio. We have increased our content per vehicle. In the automotive segment, we have added new customers and expanded our presence in geographies where we were not present a year ago. We are also entering new verticals," Mital said.

"Our 3CX10 strategy is always in play. That is how we plan for the group and focus on building diversification. If one segment is facing a downturn in a particular geography, we can still find solutions for ourselves in other segments or markets," he said.

On rising copper prices, Tongia said the company's wiring harness business, which accounts for around 30 per cent of group revenue, had contractual arrangements that allow changes in input costs to be passed on to customers at quarterly or six-monthly intervals.

"Copper has risen sharply in recent times. In the wiring harness business, we have a contractual arrangement with our consumers, under which we can increase or decrease costs on a quarterly or six-monthly basis. So, to that extent, we don't expect any significant impact on our profitability because of copper prices," he said.