Why Samvardhana Motherson shares declined in Wednesday's trade

The stock came under selling pressure after BMW, one of the key clients of the auto component major, issued a profit warning for the 2025 financial year, cutting its earnings forecast following weaker-than-expected performance in China and delays in tariff refunds between the European Union and the United States.

The automaker announced the revised outlook late Tuesday, shortly after markets closed, signalling that profit before tax will now come in slightly below last year’s level.

The BMW Group is the world's leading manufacturer of premium cars and motorcycles. It is headquartered in Munich and produces motor vehicles in Germany, the United Kingdom, the United States, Brazil, Mexico, South Africa, India, and China.

According to available information, BMW represented 5% of Motherson's total revenue in fiscal year 2024 (FY24).

BMW said its automotive segment’s earnings before interest and taxes (EBIT) margin is now expected to reach between 5% and 6%, down from the previously guided range of 5% to 7%. Likewise, the return on capital employed (RoCE) for the automotive division has been reduced from 9–13% to 8–10%.

BMW attributed the revision primarily to continued market challenges in China, its largest single market. "While sales in China stabilised during the third quarter and matched last year’s levels, the company failed to achieve the targeted increase in volume. BMW now expects lower sales volumes in China for the fourth quarter of 2025," the BMW blog read.

Further, BMW noted that its assumption of tariff reductions between the European Union and the United States has not yet been realised. The automaker had expected tariffs on imported vehicles and auto parts to drop from 10% to 0% retroactively from August 1, 2025, but said reimbursements are now unlikely to be received before 2026.

About Samvardhana Motherson

Samvardhana Motherson International Ltd (SAMIL), formerly known as Motherson Sumi Systems Ltd, is one of the leading manufacturers of components for the automotive and transport industries. It is also the world’s largest supplier to automotive original equipment manufacturers (OEMs). Besides that, the group serves a range of customers in non-automotive businesses as well.

Motherson has a broad product portfolio, making it a full-system solutions provider for many customers in different industries. Its business divisions include wiring harnesses, vision systems, modules and polymer products, elastomers, precision metals and modules, technology and industrial solutions, logistics solutions, lighting and electronics, aerospace, health and services.

The company was incorporated in 1975 by current chairman Vivek Chaand Sehgal and his late mother, Swaran Lata Sehgal, as a small wire-making company. In 1977, the company set up its first cable factory.