Neutral SONA BLW Precision Forging; target of Rs 620: Motilal Oswal

Motilal Oswal's research report on SONA BLW Precision Forging

SONA BLW Precision Forging (SONACOMS)’s 1QFY25 operating performance was in line on all fronts. The healthy revenue/PAT growth of ~22%/24% YoY, despite a weak environment, stems from its growth in the BEV segment along with an effective execution of the robust order book. The BEV segment now accounts for 33% of the revenue vs. ~29% in FY24. SONACOMS' strong performance is evident in its attractive valuations of ~65x/52x FY25E/FY26E EPS, reflecting its robust EV order book and superior earnings and return profile. However, given the demand uncertainties in its key markets and limited potential for a re-rating, we reiterate our Neutral rating with a TP of INR620, premised on ~45x Jun’26E consol. EPS.

Outlook

Valuations at ~65x/52x FY25E/FY26E consol. EPS largely factor in these positives. Reiterate Neutral with a TP of INR620 (based on ~45x Mar’26E consol. EPS).