Operating performance beat est, led by reduced RM cost and favorable product mix

Company
24 Jan 2024
5 Min read 
  • SONA BLW Precision Forging's 3QFY24 results beat estimates, driven by lower raw material costs and favorable product mix.
  •  EBITDA margin guidance has been revised to around 28% from the previous guidance of 25-27%.
  •  The company's focus on expanding in the electric vehicle (EV) market continues, with EV revenue contributing around 30% to total revenue.
  •  The company's financials and valuations are strong, with a projected EPS growth of 32% in FY24 and a strong order book.
  •  The NA and EU light vehicle markets are expected to be promising, with major OEMs focusing on electrification.
  •  The company's valuation is already factoring in its strong EV order book and superior earnings and return profile.
  •  The stock is rated as Neutral with a target price of INR610.
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