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Motilal Oswal Report
Sona BLW Precision Forgings Ltd.'s Q2 FY24 results beat our estimates, led by better mix that contributed to an Ebitda margin of 28.2% (versus estimate 27.4%).
Sona BLW's focus on expanding in electric vehicles remains steadfast, with BEV accounting for ~27% of the revenue (versus 26% in FY23).
Additionally, the company now aims for a long-term growth in the broader non-auto mobility sector, which currently represents ~10% of the revenue.
We maintain our FY24E/25E earnings per share projections. We believe the current valuation of ~57.6 times/44.4 times FY24/25E EPS reflects the company's robust EV order book as well as its impressive earnings and return profile.
We maintain our 'Neutral' stance on the stock, with a target price of Rs 565 (based on ~45 times September-25E consolidated EPS).
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