Sona Comstar zooms 101% from January low; hits new high in weak market

Sona BLW Precision Forgings (Sona Comstar) share price hit a new high of ₹882, gaining 4 per cent on the BSE in Wednesday’s intraday deals in an otherwise weak market. The stock price of the auto ancillary company quoted higher for the third straight day, surging 17 per cent on reporting its highest-ever revenue, earnings before interest, taxes, depreciation, and amortization (EBITDA) and profit after tax (PAT) for the quarter ended September 2026 (Q2FY27).

The market price of Sona Comstar has more than doubled or zoomed 101 per cent from its 52-week low of ₹438 touched on January 21, 2026.

Sona Comstar reported a 29.9 per cent year-on-year (YoY) growth in net profit at ₹223.40 crore for Q2FY27 compared with ₹172 crore in the corresponding quarter a year ago. Revenue from operations surged 35.2 per cent YoY to ₹1,546 crore in Q2FY27 from ₹1,144 crore in Q2FY26. EBITDA rose 23.3 per cent to ₹356 crore from ₹289 crore, while the EBITDA margin contracted from 25.2 per cent to 23 per cent.

The company said the margin was lower due to product mix and higher input prices partially offset by the positive impact of operating leverage.

Sona Comstar is a leading mobility technology company providing mission-critical systems and components for electrified and non-electrified powertrain segments.

The company commercialised three new products, highest-ever in a quarter, which includes a helical limited slip differential for electric vehicles (EVs), air springs for railway passenger coaches and rear radar sensors for two-wheelers. The company secured ₹3,600 crore in new business, taking net order book to ₹25,100 crore, second-highest quarter end level.

Analysts at Jefferies retained a 'Buy' rating on Sona Comstar with a higher target price of ₹950. The company secured new orders across differentials, radar sensors and motors & motor controllers. Sona's recent partnership with Denso and entry into robotics & physical AI has also opened up big opportunities. Its 51x 1Y forward PE is rich, but multiples should sustain given strong engineering capabilities and growth potential, the brokerage firm said in the result update.

“We raise FY27-29E EPS by 4-7 per cent, factoring higher top line. We expect 22-24 per cent revenue and EPS compound annual growth rate (CAGR) over FY26-29E. Sona aims to expand its revenues by 10x in 10 years. Stock has outperformed Nifty-50 by 63 per cent current year to date, and is now trading at 51x 1-year forward PE, in line with the average since listing,” Jefferies said.

While the company is seeing traction from the domestic EV market, the global auto demand slowdown and a slower-than-expected EV transition in key markets remain the key concerns for Sona Comstar, given that 61 per cent of its order book is from EVs, analysts at Motilal Oswal Financial Services said in the Q2 result update.

Its recent strategic partnership with Denso is certainly a key positive as it is likely to open up strong growth opportunities for both partners in the long run. However, following the recent run-up in the stock, most of the positives appear to be factored in. The stock at 57.6x/46.3x FY27E/FY28E appears fairly valued, the brokerage firm said, while reiterating a 'Neutral' rating with a target price of ₹800, valued at 42x Sep’28E EPS. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.