Buy Sona BLW Precision Forgings; target of Rs 600: ICICI Securities

ICICI Securities's research report on Sona BLW Precision Forgings

Sona BLW (SONA) has demonstrated resilience amidst challenging demand environment and its Q2FY26 performance was above our estimate. Global supply-chain disruptions are driving new order enquiries for SONA. Direct impact of US tariff remains limited in the near term (3% of its revenue is at risk). Its EV business (32% of revenue) growth is also expected to improve with rare earth magnet issue largely behind and reduced customer dependency. Healthy orderbook (~INR 236bn) and consistent expansion in product portfolio are expected to support growth.

Outlook

We have increased EBITDA margin estimate by 60-80bps and EPS estimate by 2% for FY26-28. Maintain BUY with DCF-based revised TP of INR 600 (earlier INR 535), implying ~35x FY27E EPS.