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Samvardhana Motherson shares dropped nearly 2% after BMW lowered its 2025 earnings guidance.
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BMW, a key customer, now expects lower pre-tax earnings and free cash flow due to weak China sales.
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The decline comes despite Samvardhana Motherson’s stock recovering 43% from its April low.
Samvardhana Motherson Shares Drop Following BMW Earnings Forecast Cut
Samvardhana Motherson shares fell nearly 2% on October 8 after German luxury carmaker BMW cut its 2025 earnings forecast. Investors reacted to the weaker outlook as BMW cited slowing sales in China and higher tariff costs.
The decline highlights the impact of global customer performance on Indian auto component makers. Samvardhana Motherson shares were trading around ₹102 apiece, reflecting caution among investors after BMW’s announcement.
BMW Earnings Forecast Revision Hits Investor Sentiment
The drop in Samvardhana Motherson shares came because BMW accounted for 5% of the company’s revenue in 2024. BMW is the fifth-largest customer, after Mercedes Benz, Audi, Volkswagen, and Maruti Suzuki.
BMW now expects pre-tax group earnings in 2025 to be slightly lower than last year, compared to previous expectations of on-par performance. The German automaker also slashed its projection for automotive free cash flow to above €2.5 billion, down from an earlier estimate of over €5 billion.
Additionally, BMW narrowed its profit margin forecast for automotive business to 5–6%, from 5–7%. Analysts say such revisions often dampen investor sentiment for suppliers like Samvardhana Motherson.
Samvardhana Motherson Shares Affected by Weak China Sales
Samvardhana Motherson shares were negatively impacted as BMW struggles with strong competition from Chinese EV makers such as BYD. BMW reported that sales rose in Europe and the US during January–September, but sales in China fell below expectations.
Investors fear that a continued slowdown in BMW’s China sales may affect future orders and revenue for Samvardhana Motherson, which supplies components to the German automaker. The stock’s 2% drop reflects these market concerns.
Samvardhana Motherson Shares: Recent Price History
Samvardhana Motherson shares have shown mixed performance in recent months. The stock has fallen nearly 4% over the past five days but gained almost 4% in the past month.
Over the past six months, Samvardhana Motherson shares have risen more than 33%, though they fell nearly 25% in the last year. The P/E ratio currently stands at around 35. The stock hit a 52-week high of ₹143.91 in October last year, then dropped more than 50% to a 52-week low of ₹71.50 in April, before recovering nearly 43% since then.
BMW Earnings Forecast Cuts Impact Auto Component Suppliers
The latest BMW earnings forecast revision underscores how global auto trends affect Indian suppliers. Companies like Samvardhana Motherson rely heavily on European carmakers for a portion of their revenue, making them sensitive to foreign market fluctuations.
Analysts highlight that any future downward revisions in BMW’s guidance or sales could continue to affect Samvardhana Motherson shares, at least in the short term. Investors should remain cautious and monitor global auto sector trends.
Samvardhana Motherson Shares Outlook
Despite the recent decline, Samvardhana Motherson shares remain well above their April lows, reflecting resilience in the auto components sector. Analysts suggest that while the short-term impact of the BMW earnings forecast cut may pressure the stock, medium-term growth prospects remain intact due to diversified customer base and recovery in global auto demand.
Investors are advised to track further developments in BMW’s sales performance, especially in China, as it could influence order volumes and revenue for Samvardhana Motherson.
Conclusion: BMW Earnings Forecast Weakness Affects Samvardhana Motherson Shares
In conclusion, Samvardhana Motherson shares dropped nearly 2% following the BMW earnings forecast cut for 2025. BMW’s weaker guidance on pre-tax earnings, free cash flow, and profit margins—primarily due to slow sales in China and tariffs—led to cautious investor sentiment.
Despite this, Samvardhana Motherson shares have demonstrated recovery from April lows and may continue to show medium-term growth potential, supported by a diversified client base and global auto industry trends.
