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Informist, Monday, Aug 4, 2025

By Sunil Raghu

AHMEDABAD - Sona BLW Precision Forgings Ltd.'s consolidated earnings for the June quarter failed to meet analyst expectations. The company's net profit fell year-on-year after logging on-year growth in the previous 11 quarters in a row. The consolidated revenue of the auto component manufacturer fell in the June quarter, declining for a second straight quarter. The consolidated revenue for Sona BLW had fallen in the March quarter after breaking a rising streak of 12 previous quarters. 

The company's consolidated net profit was INR 1.25 billion for the June quarter, down 12% from INR 1.42 billion in the same quarter last year. Analysts had expected the company to report a net profit of INR 1.33 billion. 

The company's consolidated revenue from operations for the quarter was INR 8.54 billion, down 4.18% on year. Analysts had expected a 3.6% decline in the company's sales to INR 8.59 billion for the June quarter. The fall in revenue was due to 25% on-year decline in sales in battery electric vehicle operations at INR 2.11 billion, the company said in its press release. Battery electric vehicle segment contributed 28% of the total revenue. 

On Monday, shares of the company closed 1.25% higher on the National Exchange at INR 443. The company announced its financial results after market hours.

The auto parts maker's other income for the quarter surged over sixfold on year to INR 441.88 million in the reporting quarter. The company's other income in the June quarter last year stood at INR 69.57 million. Its foreign exchange gains for the quarter were at INR 30.09 million in Apr-jun, compared to a loss of INR 18.56 million a year ago.

Sona BLW Precision Forgings' total expenses for the June quarter increased marginally by 1.34% on year to INR 7.21 billion. Its cost of materials consumed rose over 8.88% on year to INR 4.16 billion. The company's depreciation and amortisation costs rose 10.5% to INR 669.94 million. Its employee benefit expenses too rose to INR 877.99 million, up 15.44% on year.

Tax expenses for the June quarter were INR 435.30 million, nearly 7.69% lower than in the year-ago period. The earnings before interest, taxes, depreciation, and amortisation, or EBITDA, for the June quarter was down 19% on year at INR 2.03 billion. This was below analysts' view of INR 2.08 billion.

Sona BLW Precision Forgings' adjusted EBITDA margin for the June quarter was 23.8%, lower than 28.1% in the corresponding quarter a year ago. The company has attributed this fall to adverse operating leverage and product mix. 

The share in revenue from the passenger vehicle segment in the June quarter to the total revenue fell to 62% compared to 71% in Apr-Jun a year ago. The share of revenue from commercial vehicles in the June quarter was unchanged year-on-year at 11%, with 1 percentage point on-year drop for electric two- and three-wheelers. The share of revenue from non-automotive segment, including railways, came in at 19%, up from 9% in the year-ago quarter.

Revenue from the battery electric vehicle segment for the June quarter fell 25% on year to INR 2.11 billion, forming 28% of the company's overall revenue. 

Adjusted net profit margin for the June quarter fell 80 basis points on year to 15.1%, mainly due to the transmission of lower EBITDA margin and higher depreciation and amortisation charges despite higher net finance income, according to the company's investor presentation. This margin includes an adjustment for exceptional expenses after taxes related to potential acquisition opportunities of INR 69 million, it said.

The auto component maker's net order book at the end of Jun. 30 was INR 262 billion, compared to INR 242 billion a year ago. Orders from electric vehicles formed 75% of the overall order book, or INR 198 billion, while non-electric vehicle orders were worth INR 54 billion. The company added new orders worth INR 28 billion in the June quarter. The company said that it had won its largest order in two-and-a-half years from its existing customer, a North America-based original equipment manufacturer, for differential assemblies.

Talking about the status of the project post signing of a binding term sheet with Jinnaite Machinery Co. Ltd. on Jul. 20 to establish a joint venture company in China, the company said it expects to commence operations later this year. Through this joint venture, the company would manufacture and supply driveline systems and components to automotive OEMs in China and globally. Sona Comstar will invest $12 million, while JBT will contribute $8 million in assets and business to the joint venture in the first phase.  End

US$1 = INR 87.66

Edited by Tanima Banerjee

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