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Informist, Thursday, Jan. 23, 2025

By Anand JC

MUMBAI – Sona BLW Precision Forgings Ltd.'s consolidated earnings for the December quarter beat analyst estimates, with the company closing Thursday's trading session 2.1% higher on the National Exchange, at INR 542.60 per share. On a year-on-year basis, Sona BLW Precision Forgings' consolidated net profit grew at the slowest rate in nine quarters, while revenue grew at the slowest rate in 11 quarters.

Sona BLW Precision Forgings' consolidated net profit was INR 1.51 billion for the December quarter, 14% higher than INR 1.33 billion in the same quarter last year. Analysts had expected it to report a net profit of INR 1.44 billion. The company's consolidated profit margin for the December quarter was 17.4%, 20 basis points higher than the year-ago period.

The company also disclosed an adjusted profit after tax for the quarter of INR 1.60 billion, which includes adjustment for exceptional expenses related to potential acquisition opportunities. The company disclosed its earnings post market hours. 

The auto component maker's consolidated revenue from operations for Oct-Dec stood at INR 8.68 billion, 11% higher than INR 7.82 billion a year ago. Analysts had expected a revenue of INR 8.61 billion for the December quarter. The company's revenue increased in double digits on year, driven by 48% surge in revenue from the battery electric vehicle business. This segment constitutes 39% of the company's overall revenues.  

The light vehicle sales in the company's top three markets – North America, Europe and India – grew 1% on year, it said in an investor presentation. The revenue includes net gain from foreign exchanges.

The company's other income surged to INR 467.91 million during the December quarter, from INR 50.1 million in the same quarter a year ago. Sona BLW Precision Forgings' total expenses for the December quarter increased to INR 7.06 billion, up 15.3% on year but down 5% sequentially. During the quarter, expenses incurred on account of cost of materials consumed and depreciation and amortisation expenses went up 15.3% and 19%, respectively. The tax expenses for Oct-Dec was INR 522 million, nearly 48% higher than the same period a year ago.

The earnings before interest, taxes, depreciation, and amortisation, or EBITDA, for the December quarter was INR 2.34 billion, in-line with analysts' view and 3% higher than INR 2.27 billion in the same period a year ago.

Sona BLW Precision Forgings' EBITDA margin for Oct-Dec was 27%, lower than 29.3% in the corresponding quarter a year ago. The company has attributed this fall to product mix. The company also disclosed an adjusted EBITDA of INR 2.4 billion for the December quarter. This includes the employee stock ownership plan cost of INR 62 million incurred by the auto component-maker under the scheme approved in 2023.

The company's net order book at the end of Dec. 31 was INR 232 billion. Orders from electric vehicle players form 76% of the overall order book, or INR 176 billion, while non-electric vehicle orders form 24%, or INR 56 billion.

APR-DEC RESULTS

For Apr-Dec, Sona BLW Precision Forgings' consolidated revenue from operations was INR 26.81 billion, 16.5% higher on year. Revenue from the battery electric vehicle segment for Apr-Dec grew 52%, forming 36% of the company's overall revenue. Light vehicle sales from the company's top three markets grew 2% on year in the first nine months of the ongoing financial year.

For the same period, the company's consolidated net profit was INR 4.37 billion, 18.6% higher on year. The profit margin remained largely unchanged on year at 16.2%.

The company's EBITDA for Apr-Dec was INR 7.4 billion, 13% higher on year. EBITDA margin for Apr-Dec fell to 27.6% from 28.4% a year ago. "Lower input cost and operating leverage had a positive impact on the EBITDA margin whereas change in product mix has pulled it down with a net margin impact of ~0.3%," the company said in its investor presentation.

Sona BLW Precision Forgings' net debt-to-EBITDA ratio fell further to (-)2.66x as of Dec. 31 from (-)0.08x as of Mar. 31.  End

Edited by Tanima Banerjee

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