SAMIL’s Corporate Credit Rating Upgraded to “AAA/Stable” by CRISIL

On July 10, 2024, Samvardhana Motherson International Limited (SAMIL) had its long-term bank facilities and corporate credit rating upgraded to AAA/Stable, the highest possible rating, from AA+/Positive by CRISIL. The short-term bank facilities rating of A1+ has been reaffirmed.

In their press release, CRISIL highlighted that the upgrade reflects SAMIL’s well-diversified business model and improved scale of operations. The ratings also emphasise the company’s healthy financial profile, strong execution track record in successfully turning around overseas acquired entities while maintaining healthy operating efficiencies, well-spaced repayment obligations, and superior liquidity profile.

CRISIL’s rating rationale further noted:

1. Due to its focus on quality and delivery, SAMIL has established strong relationships with major global OEMs. The group benefits from a sustained inflow of new orders from OEMs, particularly in its major divisions—modules and polymer, wiring harnesses, vision systems, and integrated assemblies. This is evidenced by its automotive booked business of USD 83.9 billion as of March 31, 2024.
2. SAMIL is expected to continue its OEM-guided acquisition strategy and undertake M&A activities. However, based on SAMIL’s established track record of acquisitions, these will primarily be driven by customers’ requirements with a prudent funding philosophy.

This rating action follows a series of recent positive rating actions by other agencies, such as Moody’s, Fitch, and JCR. It serves as a strong testament to SAMIL’s robust credit profile, which is built on a diversified business model, strong customer relationships, and prudent financial policies.

About Samvardhana Motherson International Ltd

Motherson Sumi Systems (MSSL) is India’s largest ancillary company, renowned for its extensive contributions to the automotive industry. The MSSL group is among the world’s leading manufacturers of exterior rear-view mirrors, holding a dominant market share globally. Additionally, MSSL is a major global player in producing polymer-based interior and exterior modules, underscoring its significant role in the automotive components sector.

On July 11, 2024, Samvardhana Motherson International Ltd’s share price opened at ₹196.50, touching the day’s high at ₹200.25 as of 09:40 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.