Sona Comstar Q3 Review - Beat Estimate, Led By Reduced Raw Material Cost, Favorable Product Mix: Motilal Oswal

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Motilal Oswal Report

Sona BLW Precision Forgings Ltd.'s Q3 FY24 results surpassed our estimates, led by better product mix and lower raw material costs, resulting in an Ebitda margin of 29.3% (versus estimates. 27.8%).

Although the operational performance was healthy, we expect the margins to moderate in the future as raw material costs and product mix normalize.

Sona Comstar’s focus on expanding in electric vehicle continue with battery electric vehicle contributing ~30% to the revenue (versus 26%/27% in FY23/Q2 FY24).

We largely maintain our FY24E/25E earning per share. We believe the current valuations of ~64.6 times /49 times FY24/25E EPS factor in its strong EV order book as well as superior earnings and return profile.

We reiterate our Neutral stance on the stock with a target price of Rs 610 (based on ~45 times December 2025E consolidated EPS).

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Motilal Oswal SONA BLW Q3 FY24 Results Review.pdf

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