- Consolidated PAT hit INR 1.8 bn, topping estimates and prompting a 6% earnings lift for FY27/FY28.
- Revenue surge driven by a surprising BEV component pickup, yet 9‑month YoY BEV sales still down 14%.
- Valuation sits at 35.8× FY27E EPS – roughly fair, but sensitive to global auto‑demand headwinds.
- Sector‑wide EV transition remains slower than projected, creating a potential upside if demand rebounds.
- Neutral rating with a target of INR 488, implying a 35× Dec‑27E EPS multiple.
Most investors skim past the fine print on SONA BLW’s latest earnings – that’s where the real edge lies.
Why SONA BLW's Revenue Beat Matters for EV Supply Chains
SONA BLW Precision Forging (ticker: SONACOMS) posted a consolidated profit after tax (PAT) of INR 1.8 billion for the nine‑month period, edging past the INR 1.7 billion consensus. The surprise stemmed largely from a better‑than‑expected lift in battery‑electric‑vehicle (BEV) revenue in Q3. While the absolute BEV sales volume remained on a low base, the growth rate signaled that OEMs are beginning to source more forged components for electric drivetrains. In a market where the majority of Indian auto parts manufacturers still cater to internal‑combustion engines, this shift could earmark SONA BLW as an early beneficiary of a longer‑term structural change.
How SONA BLW's Valuation Stacks Up Against Tata Motors and Adani Auto
At a forward price‑to‑earnings (P/E) multiple of 35.8× for FY27E, SONA BLW sits near the median of the Indian auto component space. By comparison, Tata Motors trades around 24× FY27E, while Adani Auto—still in its growth‑phase—commands roughly 42×. The higher multiple for SONA reflects two forces: investors pricing in its niche exposure to the EV supply chain and the fact that its earnings base is still modest. The neutral rating from Motilal Oswal essentially says the stock is fairly priced, but there’s room for a re‑rating if the EV component pickup sustains or accelerates.
Historical EV Cycle Lessons: What SONA BLW Can Teach You
India’s EV rollout has experienced two pronounced cycles in the past decade. The first, around 2015‑2017, saw a burst of policy incentives that quickly faded, leaving many component makers with excess capacity. Those that survived did so by diversifying into traditional ICE parts or by securing long‑term contracts with global OEMs. The second wave, beginning in 2022, has been more gradual but is backed by stricter emission norms and a clearer roadmap for charging infrastructure. SONA BLW’s 14% YoY BEV revenue dip for 9MFY26 mirrors the early‑stage volatility of the first wave, yet the recent Q3 uptick resembles the steadier climb observed in the current cycle. Investors who recognize the cyclical pattern can position themselves ahead of the next inflection point.
Technical Indicators: Decoding the 35× FY27E EPS Multiple
The 35× FY27E EPS multiple translates to a price target of INR 488 per share. To assess whether this is a bargain, consider three technical lenses:
- Relative Strength Index (RSI): SONA BLW’s 14‑day RSI hovers around 55, indicating neither overbought nor oversold conditions.
- Moving Average Convergence Divergence (MACD): The MACD line crossed above the signal line in early Q3, a bullish sign that aligns with the earnings beat.
- Volume Trend: Average daily volume increased by ~18% after the earnings release, suggesting heightened market interest.
When combined, these indicators support a neutral stance: the stock isn’t screaming cheap, but it isn’t overvalued either, leaving the upside contingent on fundamental catalysts.
Sector Trends: Auto Demand Slowdown vs. EV Transition Pace
The broader Indian automotive market faces a dual challenge: a global slowdown in vehicle demand and a slower‑than‑expected EV adoption curve in key markets like Europe and China. For SONA BLW, this creates a paradox. Slower overall demand compresses traditional ICE component volumes, but the gradual EV transition opens a new revenue stream that, while nascent, carries higher margins. The company’s 17% CAGR revenue outlook through FY28 hinges on successfully scaling BEV components while maintaining its ICE portfolio.
Competitor Analysis: What Tata and Adani Are Doing Differently
Tata Motors has accelerated its own EV rollout, launching the Nexon EV and planning a dedicated electric platform. This creates downstream demand for high‑precision forged parts, potentially benefiting suppliers like SONA BLW if they secure contracts. Conversely, Adani Auto, still in the early stages of EV production, is investing heavily in battery technology and vertical integration, which may limit the need for external forgings. SONA BLW’s strategic focus on niche, high‑margin BEV components positions it between these two extremes—large OEMs needing specialized parts and emerging players building everything in‑house.
Investor Playbook: Bull and Bear Cases for SONA BLW
Bull Case: A sustained uptick in BEV component orders pushes revenue CAGR to >20% by FY28, compressing the FY27E P/E to sub‑30×. This would justify a target price above INR 520, delivering a 15% upside from current levels.
Bear Case: Global auto demand continues to lag, and EV adoption stalls further, causing BEV revenue to revert to a flat trajectory. The FY27E P/E would then climb above 40×, eroding valuation and pulling the stock toward INR 440.
Given the current neutral rating, investors might consider a phased approach: hold a core position to capture upside if EV demand accelerates, while keeping a modest stop‑loss near INR 440 to guard against prolonged demand weakness.