Sona BLW surges 18% on strong Q1 results, healthy order book position

In Q1FY22, Ebitda margin improved to 27.7 per cent from 19 per cent in Q1FY21 due to better product mix and operating leverage

Shares of the recently listed auto parts and equipment company Sona BLW Precision Forgings (Sona Comstar) surged 18 per cent to Rs 484.20 on the BSE in intra-day trade on Monday after the company reported a strong set of numbers for the quarter ended June 2021 (Q1FY22).

Sona Comstar is a leading automotive technology company providing mission-critical systems and components for electrified and non-electrified powertrain segments. The company had made its market debut on June 24, 2021. The stock was trading at the highest level since its listing. With today’s surge, it has zoomed 66 per cent over its issue price of Rs 291 per share.

The company is one of the few companies globally, with the ability to design high power density electric vehicle (EV) systems handling high torque requirements with a lightweight design, while meeting stringent durability, performance and NVH specifications, enabling EV manufacturers to enhance the vehicle range, acceleration and the overall efficiency.

In Q1FY22, Sona Comstar reported a strong 226 per cent year-on-year (YoY) revenue growth of Rs 500.7 crore, due to 565 per cent growth in EV revenue and lockdown impact in the comparable quarter last year. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin also improved YoY from 19 per cent to 27.7 per cent in Q1FY22 due to better product mix and operating leverage. On a sequential basis, Ebitda margins improved by 170 basis points (bp) from 26 per cent in Q4FY21.

Further, the company reported a net profit of Rs 82.2 crore compared to nil in the comparable quarter last year because of the lockdown impact. During the reported quarter, there is Rs 13.2 crore of exceptional gain related to the reversal of IPO-related expenses, the company said.

As on June 30, 2021, the company’s net order book stands at Rs 14,000 crore of which 57 per cent is from EV.

Net order book means the aggregate revenue from awarded programs which are either yet to start production or are yet to fully ramp up, in the next 10 years, after adjusting for the negative impact of all programs that are expected to reach end of life or be phased out. We have also applied a discount to accommodate any unforeseen delays or changes in program launches that may happen in the future, the company said.

The company has partnered with Israel's IRP Nexus Group for a unique joint development project to develop a magnet-less powertrain, manufacture it and market it globally.

At 12:35 pm, Sona Comstar was trading 16 per cent higher at Rs 476.80 on the BSE, compared to a 0.16 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped 5-fold with a combined 9.65 million equity shares having changed hands on the NSE and BSE.