Alpha | Sona BLW Precision Forgings Ltd.- Equity Research Desk

Sona BLW Precision Forgings Ltd. – EV Player

Sona BLW Precision Forgings Ltd. is one of India’s leading automotive technology companies which designs, manufactures, and supplies highly engineered, mission-critical automotive components such as differential assemblies, gears, conventional and micro-hybrid motors, BSG systems, and EV Traction motors across all vehicle categories. Initially, the company was incorporated as “Sona Okegawa Forgings Limited” in 1995, and subsequently, the name was changed to “Sona BLW Precision Limited” in 2013. The company has 9 manufacturing and assembly facilities of which 6 are located in India and one each in China, Mexico, and USA.

Valuation:

The company has reputed client credentials with a highly profitable self-funded business model which warrants premium valuations. We believe SONACOMS is likely to be the fastest growing India-based Auto ancillary company with a 30% PAT CAGR over FY22-24E and having significant exposure to the EV segment. Hence, we recommend a BUY rating in the stock with the target price (TP) of Rs.620, 60x FY22E EPS.