Sona Comstar Q4 Results Review - Decent Quarter; Downgrade To Neutral: Yes Securities

Yes Securities Report

Sona BLW Precision Forgings Ltd. Q4 FY24 results were better as revenue/Ebitda/adjusted profit after tax exceeded our estimates by 5-7%. Ebitda margins though were in-line at 27.9%, it expanded 100 basis points YoY (-180 bp QoQ), led by favorable product mix and operational efficiencies despite higher freight rates (35-40 bp impact) and ESOP cost of Rs 80 million in Q4 FY24 (versus Rs 4 million in Q4 FY23).

The management indicated UAW strike impact is revered in Q4 FY24 (as guided in 3Q). On the positive side, the key highlight of the quarter was, the resilient margins despite multiple headwinds and management comments around no delay in order book ramp-up for BEV given declining EV shift.

On the other hand, adjusted new order addition were slightly weaker at ~Rs 12 billion (versus ~Rs 20 billion/ Rs 13 billion/Rs 5 billion/Rs 42 billion/Rs 4 billion/Rs 28 billion/Rs 6 billion orders added in previous seven quarters).

Company’s overall orderbook stands at Rs 226 billion (versus Rs 240 billion QoQ and Rs 215 billion /Rs 186 billion in FY23/FY22). EV revenue mix during Q4 FY24 were at 32% (versus 30%/27%/26% in Q3 FY/Q2 FY24/Q1 FY24).

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