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Informist, Wednesday, Jan. 21, 2026

By Akshat Saksena

MUMBAI – Sona BLW Precision Forgings Ltd.'s top line for the December quarter is expected to grow by almost 30% as the consolidation of its railway business in the June quarter will boost numbers compared to the year-ago quarter, according to analysts. However, weakness in differential assembly business, which accounts for 16% of total sales, is likely to limit the rise of the top line. The bottom line is expected to slow down owing to unfavourable mix, led by low-margin businesses.

The auto parts maker is expected to report a consolidated net profit of INR 1.72 billion for the December quarter, according to an average of estimates from eight brokerage firms. This translates to a near-14% on-year growth over the year-ago quarter profit of INR 1.51 billion, which included a small one-time cost of INR 56.99 million. Elara Securities (India) Pvt. Ltd. has the highest estimate for the company's net profit at INR 2.22 billion and JM Financial Institutional Securities Pvt. Ltd. has the lowest estimate of INR 1.55 billion.

The company is expected to report revenues of INR 11.23 billion for the quarter under review, implying a rise of over 29% on year but a fall of nearly 2% on quarter, according to the average of estimates. The highest estimate for the company's revenue is INR 11.48 billion from YES Securities (India) Ltd. and the lowest estimate is INR 10.86 billion from JM Financial.

"Revenue growth of 30% YoY (year-on-year) is largely a function of the integration of the Railways division," Motilal Oswal Financial Services Ltd. said in a report. The company's traction motors business is expected to drive demand alongside its railway business, according to the brokerage. Meanwhile, Kotak Securities Ltd. expects revenues for the company, excluding its railway business to be driven by strong growth in its tractor motor and starter motor verticals.

The rise seen in the company's revenue is, however, expected to be offset by the weakness seen in its differential assembly business, according to brokerages. This is due to the weak performance of its global electric vehicle sales and lower output by US-based automobile companies owing to cuts in subsidies, Kotak Securities said. The subdued demand in exports of starter motors and gears because of the US tariffs is also expected to contribute to the low growth of revenue, according to ICICI Securities Ltd. North America accounted for 30% of the company's revenue in Apr-Sept and 41% in 2024-25 (Apr-Mar).

The auto parts manufacturer is likely to report earnings before interest, tax, depreciation, and amortisation of INR 2.76 billion in the December quarter, according to the average of eight estimates. This implies a rise of nearly 18% on year, but a fall of 4.5% on quarter. The highest estimate for the company's EBITDA is INR 2.83 billion from Elara Securities and the lowest estimate is INR 2.63 billion from JM Financial.

Most brokerages tracking the company expect its EBITDA margin to contract both from the trailing quarter as well as the year-ago quarter. Among the EBITDA margin estimates from five brokerages, the highest is 25% by Nomura while the lowest is 24.5% by ICICI Securities. In the year-ago quarter, the company's EBITDA margin came in at 27% and it was 25.3% for the September quarter.

Brokerages expect the company's EBITDA margin to contract due to an unfavourable product mix and the consolidation of its low margin railway business. The product mix is seen as unfavourable because of a lower contribution from the differential assembly business and higher contribution from its motor business, according to Kotak Securities. Higher operating costs will also lower the company's EBITDA margin to contract, according to YES Securities.

Sona BLW is a mobility technology company that designs, manufactures, and supplies systems and components for global mobility original equipment manufacturers. Headquartered in Gurugram, the company operates 11 manufacturing and assembly facilities across India, China, and the US. The company will announce its December quarter earnings on Friday.

Additions to the company's order book, especially from Europe as three differential suppliers in the region have now become insolvent, and the contribution of the electric vehicle business will be monitored.

Out of seven brokerage reports on the company available with Informist, six have a 'buy' recommendation on the stock, with an average target price of INR 577. This is 30% higher than the current market price. The remaining brokerage has a 'hold' recommendation on the stock.

The stock has fallen nearly 8% since the company announced its September quarter earnings on Oct. 27. Wednesday, shares of the company closed slightly lower at INR 444.45 on the National Stock Exchange.

The following are the Oct-Dec earnings estimates for Sona BLW Precision Forgings from eight brokerages in descending order by the estimate of net profit in INR billion:

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Edited by Deepshikha Bhardwaj

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