IGI Logo

Below is quote on Sona BLW Precision Forging Ltd, stock up by over 12% today by Mr. Milan Desai, Lead Equity Analyst, Angel One Ltd

Sona BLW is one of India’s leading automotive technology companies that derives ~40% of its revenues from Battery Electric Vehicles (BEV) and Hybrid Vehicles and is the best play on the electrification trend in the Indian automobile industry. The company provides EV differential assemblies and gears, BSG systems and EV traction motors to global customers. ~75% of their income from sale of goods in FY21 came from end-use in the overseas markets. The global BEV segment has been fastest growing and is expected to maintain a high growth rate which is positive for Sona BLW.  The company’s capabilities have enabled them to gain market share across its products especially for products related to EV/BEV. They also have strong market share ranging from 55-90% for differential gears for PV, CV and tractor OEMs in India. Given the traction in the BEV/Hybrid Vehicle space, we believe that Sona BLW will continue to command a higher multiple which is justified by ~47% earnings CAGR over FY21-24E. We remain positive on the future growth prospects of the company and have a BUY rating on the stock with a target price of Rs. 719.

Above views are of the author and not of the website kindly read disclaimer