Sona BLW Precision Forgings Ltd. has garnered mixed reviews from brokerages after its second quarter results for fiscal year 2027 even as it bagged target price hikes from Kotak Securities, Goldman Sachs, and Jefferies.
Despite raising its price target to Rs Rs 700 from Rs 675, Kotak has maintained its sell rating for the stock given its expensive valuation. However, the brokerage took note of the company's healthy topline performance and Ebitda beat by 9.5% in the September quarter.
It highlighted that Sona Comstar 2.0 will outline the next phase of growth, along with partnership with DENSO across two-wheelers, three-wheelers, four wheelers, commercial vehicles EV and hybrid powertrains.
On the other hand, Jefferies has retained a 'buy' rating on the stock while hiking the price target to Rs 950 from Rs 900 as it believes that even though the valuation is rich, the multiples should sustain given strong engineering capabilities and growth potential.
Sona BLW beat Jefferies estimates for Q2 growth, and had a good order traction during the quarter with new orders across differentials, radar sensors and motors & motor controllers.
The brokerage underlined that recent partnership with Denso and entry into robotics & physical AI has also opened up big opportunities.
Goldman Sachs has raised Sona BLW's price target to Rs 860 from Rs 855, while maintaining a 'neutral' rating on the stock. The brokerage outlined that Q2 beat was driven by EV traction and suspension motors growth.
Going ahead, these two segments are expected to lead growth in the second half of the financial year 2027, according to the brokerage. GS saw improving momentum in the EV traction motor and suspension motor business at a more modest margin.
Sona BLW Q2 FY27
Sona BLW reported a 29% year-on-year increase in consolidated net profit to Rs 223.4 crore for the September quarter, supported by a 35% rise in revenue as the automotive components maker sustained growth during the period.
Revenue from operations rose to Rs 1,546 crore in the second quarter, while earnings before interest, tax, depreciation and amortisation increased 23% year-on-year to Rs 356.2 crore.
The company's Ebitda margin stood at 23%, reflecting its profitability relative to revenue, even as earnings growth trailed the expansion in sales.
The changing automotive technology and industries gradual shift towards electrification, which has substantially enhanced demand for components used in electric and hybrid vehicles, has resulted in the upward growth for the Sona BLW. The company supplies precision-engineered automotive systems and components to manufacturers across global markets.
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