Motilal Oswal's research report on SONA BLW Precision Forging
SONA BLW (SONACOMS)’s adjusted EBITDA margin came in below our estimates in 4QFY25 due to a model changeover at one of its key OEMs as well as an adverse mix. Adjusted PAT exceeded our estimates because of higher-than-expected other income from surplus funds. The company continues to win new orders, especially in its core division, resulting in its ever-increasing order backlog at INR242b (6.8x revenue in FY25). The share of EVs was higher in the order book/revenue at ~76%/36% as of FY25. SONACOMS is now seeing the impact of a slowdown in the EV transition, with 4Q revenue/EBITDA declining 4%/1% YoY. The ongoing global tariff war, weak global macro, and expected supply chain disruption, especially in EVs, remain key headwinds in the near term, which would restrict growth.
Outlook
Given these factors, valuations at ~49x FY26E/44x FY27E consol. EPS appears expensive. Reiterate Neutral with a TP of INR490, premised on ~40x FY27E consol. EPS and assigning INR49/share for the recently acquired railway business.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
