Samvardhana Motherson Shares Fall 3% on US Reciprocal Tariff Jolt; Auto Stocks Under Pressure

The stock market in India witnessed a sharp reaction following US President Donald Trump's latest reciprocal tariff announcement. With India facing a steep 26% tariff on exports to the US, auto component makers, including Samvardhana Motherson International Ltd, have been hit hard. Investors rushed to offload auto sector stocks, fearing a significant impact on earnings. As a result, Samvardhana Motherson shares slipped 3% in early trade.

Samvardham motherson share price today

Shares of Samvardhana Motherson took a massive hit, plunging 3.19% to Rs. 128, down from its previous close of Rs. 132.22. The auto parts maker has faced sustained selling pressure, slipping 4.85% in the last five days, 37% in the past six months, and 17% year-to-date, due to growing concerns over trade uncertainties.

Trump's Reciprocal Tariff Shocks The Auto Stocks

The spotlight is on the sector after Trump unveiled a 25% tariff on all foreign-made automobiles, raising concerns about the impact on Indian automakers and auto component manufacturers. In response Indian Auto stocks, including Tata Motors, Maruti Suzuki, and Samvardhana Motherson, are facing selling pressure.

Vinit Bolinjkar, Head of Research at Ventura explained "The US government has introduced sweeping reciprocal tariffs targeting countries with high trade barriers against American goods, along with a baseline 10% levy on all imports. China will be subject to a 34% tariff, while India and the European Union will face rates of 26% and 20%, respectively."

"This policy shift is likely to dampen domestic consumption in the US, potentially easing inflationary pressures. However, it may also lead to a global supply glut, raising the risk of a deflationary environment across international markets. In light of these developments, we anticipate a 25-50 bps rate cut due to the inflation slowdown and support long-term consumption."
"While the immediate impact is being felt in India and its equity markets, the country remains relatively well-insulated over the long term, supported by robust domestic demand and rising trade opportunities with alternate global partners," he further added.

What Would Be The Impact on The Sectors

"The US government exempted imports of generic pharmaceuticals, agriculture, energy and certain other minerals from the scope of his newly announced reciprocal tariffs.

Autos, IT and textiles will face significant hits to their business. The 26% reciprocal tariff on autos is in addition to the 25% tariff the US has announced on imported automobiles and auto parts. This move could significantly impact the earnings of auto exporters to the US market, especially Tata Motors, Sona Comstar, Bharat Forge and Motherson Group." Bolinjkar further added.

About Samvardhana Motherson

Samvardhana Motherson is a leading global supplier of automotive components and solutions. The company specialises in wiring harnesses, rearview mirrors, polymer processing, metal forming, and modules & systems. With a strong presence across 41 countries, Samvardhana Motherson serves major automobile manufacturers worldwide. The company has consistently expanded through strategic acquisitions and partnerships, strengthening its position in the automotive industry. Its diversified portfolio and strong customer base make it a reliable player in the auto components sector.

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