Analyst Concall
Sona BLW flags INR 40 mln yearly cost from new labour codes
This story was originally published at 20:12 IST on 23 January 2026
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--Sona BLW: See impact from new labour codes INR 40 mln per year
--Sona BLW: Got first year product-linked incentive from govt in Jan
--CONTEXT: Comments by Sona BLW mgmt in post-earnings analyst call
--Sona BLW: European competitors facing significant financial difficulties
By Gunjan Rajput and Kabir Sharma
MUMBAI – Sona BLW Precision Forgings expects an annual cost impact of around INR 40 million from the implementation of new labour codes, the company's management said in a post-earnings analyst call Friday. The labour codes came into effect from Nov. 21 and resulted in a one-time impact of INR 300 mln on profit after tax in the December quarter, the management said.
The management also said the company received its first-year product-linked incentive payout in January. "Our first year PLI benefit from the government during the month of January. So that completes our first cycle of PLI income booking and conversion of it into cash flow", the company's management said.
The company said its net order book stood at INR 2.75 trln at the end of the December quarter, with electric vehicle programmes accounting for 71%, while diversification across geography, products and end-markets helped sustain margins despite volatility in global auto demand.
On trade-related issues, the management said tariffs in the US are borne by importers and not exporters, in line with global trade norms, and apply uniformly based on product classification and country of origin.
The company's consolidated net profit for the reporting quarter fell marginally on year and 13% on quarter to INR 1.51 billion. The net profit missed analysts' estimates of INR 1.72 billion. The bottom line was hampered by a one-time cost of INR 401.39 million on account of implementation of the new codes. Excluding the one-time cost, the company's bottom line was at INR 1.91 billion, higher than the Street's estimate.
The company's consolidated revenue from operations rose 38% on year and over 5% sequentially to INR 12 billion. This metric also beat analysts' consensus estimate of an over-29% year-on-year rise to INR 11.23 billion. Sequentially, analysts had estimated a fall of nearly 2% in the revenue from operations.
Amid demand disruption in global markets, Sona BLW Precision Forgings said several of its European competitors are facing significant financial difficulties. The company said it has 64 electric vehicle programmes of which 33 are currently in production, while the remaining 31 are under development, showing encouraging progress.
During the quarter, the company added air springs for railway coaches to its product portfolio. These air springs, which enhance passenger comfort and ride quality through superior cushioning, open opportunities in the high-speed rail segment, including Rajdhani, Shatabdi, Vande Bharat and Amrit Bharat trains, the management said. The addition also positions the company as a comprehensive suspension systems supplier to Indian Railways.
The company also introduced an integrated hydraulic motor and controller for farm equipment, which is expected to expand its presence in the agricultural segment, the management said.
On employee costs, the company said part of the increase is linked to revenue growth, while staff costs also rose due to its annual increment cycle from October to October. As a result, employee expenses are not expected to rise meaningfully in the near term, the management said.
Friday, the company's shares closed at INR 456.10, down nearly 3% on the National Stock Exchange. End
Edited by Deepshikha Bhardwaj
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