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Informist, Wednesday, Apr. 30, 2025

By Gopika Balasubramanium and Anjana Therese Antony

MUMBAI – As uncertainties about the impact of US tariffs persist, Sona BLW Precision Forgings Ltd. anticipates this to impact 3% of revenue from the US in the next 12-18 months. "...we have 40% of our total revenue to US, in which we have identified 3% where there could be some risk of either revenue loss, that is the extent of impact we know of," the management said in a post-earnings conference call Wednesday. 

For the financial year ended March, Sona BLW posted a 16% on-year growth in its consolidated net profit to INR 6.01 billion, and while revenue grew 11% to INR 35.46 billion. Of this, revenue from North America accounted the most among all the regions, contributing 41% to the top line in 2024-25 (Apr-Mar). The second-biggest region is India generating 29%, followed by 24% from Europe.  

The company also expects US tariffs to adversely impact the demand for cars and light trucks. "...in a fairly confusing and uncertain time, we believe this trade war to be disruptive and adverse in the short term for the entire global auto industry," the company said. "However, in the medium-to-long term, we expect many opportunities to emerge from this chaos," the management said.

Revenue from passenger vehicle segment comprised 71% of the total sales in FY25. The company is a key automotive technology provider for original equipment manufacturers across the world and sells drivetrain parts such as differential assembly and differential gear, which together accounted for more than half of its top line in FY25. 

The company said while tariffs may open new doors, it may also lead to disruptions in global automotive production due to supply chain complexities and high dependence on China, especially for rare earth materials. The company said it is working with its stakeholders, the Indian government, and the Chinese embassy to speed up the process of importing magnets from China. The company is also evaluating alternate materials, including ferrite, different grades of magnets, technologies, as well as supply sources.

When asked whether the recent restriction by China on rare earth magnets on production of traction motors, the company said, "We have inventory right now, so nothing yet. We are working with our suppliers to get them the export licenses." Rare earth magnets are crucial components in vehicle motors, especially in electric vehicles, as they generate strong magnetic fields that interact with coils to produce the torque needed to drive the vehicle's wheels.

The company said magnetisation can be also be achieved with lower grade magnets, even with ferrite magnets, but that comes with a risk of making motors heavier which is not efficient. "This is not an unsolvable problem. It can have some short-term impact if we can solve it directly and get the supplies started in the next four-five weeks," the company said, adding that it was exploring other sources and suppliers outside China. 

In the last week of March, Sona BLW received a large order from a US company launching new electric car just after US tariffs were announced, it said. Supplies for this client will likely begin from the March quarter. 

Apart from its core automotive technology business, the company is planning to leverage its capabilities to develop components for the humanoid robot market where rapid adoption is expected over the next decade. "Humanoids in our day-to-day life is closer to reality than most people agree, from industrial and logistics to commercial applications, and finally, households," the company said. The company said it has begun exploratory work in components and systems that will help it to get into this field faster. The company will leverage its capabilities across its driveline motor and sensor divisions to offer integrated products like rotary linear actuators and vision systems.

For the quarter ended March, its consolidated net profit rose nearly 11% on year to INR 1.64 billion and revenue fell over 2% to INR 8.65 billion. Shares of the company closed 2% lower at INR 481.15 Wednesday.  End

Edited by Akul Nishant Akhoury

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