Neutral SONA BLW Precision Forging; target of Rs 600: Motilal Oswal

Motilal Oswal's research report on SONA BLW Precision Forging

SONACOMS’ 1QFY24 operating performance was in line. Its revenue/ EBITDA grew 24%/43% YoY. The company has won a new order worth INR13b in 1QFY24 (total order book was at INR220b) and salience of EV in order book has risen to 78%. Conventional start-motor is now just 11% of revenue.

Outlook

We raise our FY24E/25E EPS by ~4%/2.5% to factor in a healthy order book execution and higher margins. Maintain Neutral with a TP of INR600 (based on 45x Sep’25E consol. EPS) owing to its expensive valuation.