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Informist, Tuesday, Oct. 22, 2024

By Apratim Sarkar

MUMBAI – Automobile parts maker Sona BLW Precision Forgings Ltd. is expected to post decent growth in its revenue for the September quarter on ramp-up in new orders and growth in the battery electric vehicles vertical and also due to growth in the US and European Union region, according to analysts. However, the revenue is expected to fall sequentially.

The Gurugram-based company's consolidated net profit for Jul-Sept is expected to grow 11% on year to INR 1.38 billion. Revenue is also projected to grow 11% to INR 8.82 billion, according to the average of estimates from four brokerages. Sequentially, its net profit is expected to decline 3% and the top line is likely to fall 1.3%.

The earnings before interest, tax, depreciation, and amortisation is seen at INR 2.43 billion, up 9% on year from INR 2.23 billion in the year-ago quarter, according to the average of estimates from four brokerages. The company's EBITDA margin is likely to have contracted due to higher employee expenses and other expenses, brokerage firm Nuvama said. The EBITDA margin of Sona BLW is expected to have contracted 50 basis points sequentially to 27.6% in the latest quarter, due to higher logistics costs and weak demand, Motilal Oswal Financial Services said.

Although Motilal Oswal expects "moderation across most of its (the company's) business segments" sequentially, it said the company's revenue for the September quarter will be driven by growth in the battery electric vehicle vertical. About 33% of the company's revenue in Apr-Jun came from battery electric vehicles, Sona BLW had said in an investor presentation after the previous quarter earnings announcement. Nuvama, on the other hand, said the company's revenue will grow on the back of growth in the European Union and the US region. About 43% of the company's Apr-Jun revenue came from North America and 23% came from Europe, Sona BLW had earlier said.

The gross profit margins of original equipment manufacturers and auto-ancillary companies are expected to improve over the June quarter on account of softening base metal prices, partly offset by higher rubber prices, according to Elara Securities. The brokerage firm gave the highest estimate for Sona BLW's net profit for the September quarter at INR 1.40 billion and the highest estimate for revenue at INR 8.90 billion. YES Securities gave the lowest estimate for the company's net profit at INR 1.35 billion and the lowest estimate for revenue at INR 8.73 billion.

Sona BLW is set to announce its September quarter earnings on Wednesday.

Following are the Jul-Sept earnings estimates of Sona BLW based on reports compiled by Informist from brokerage houses.

End

Edited by Ashish Shirke

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