1 month ago
Bernstein raised its target price on the Sona BLW Precision Forgings to Rs 780, maintaining its outperform rating.
March 28, 2024 / 09:12 AM IST
Over the past six months, shares of the firm gained 17 percent.
Global brokerage Bernstein raised its target price on Sona BLW Precision Forgings as the automotive systems and components manufacturer was on the "right side of auto disruption".
Bernstein raised its target price on the company to Rs 780 from Rs 770 earlier, implying an upside of 14.5 percent. The brokerage maintained its 'outperform' rating.
The moderation in the global growth rate of EVs has been less of a challenge to the company. Excluding China, Sona BLW's market share is positively linked to the EV penetration.
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While the valuations appear rich to the global brokerage, they are reflective of the current growth phase. Bernstein said that valuation stacks up well on the growth valuation grid in relation to its peers.
Sona BLW Precision reported a 24 percent year-on-year (YoY) rise in net profit at Rs 113.6 crore for the third quarter ended December 2023.
The company recorded a substantial increase in revenue from operations, surging by 15.8 percent to reach Rs 781.80 crore during the quarter, compared to Rs 675.30 crore in the same quarter of the previous year.
The battery-driven electric vehicle (BEV) segment reported a 28 percent on-year revenue increase, constituting 30 percent of overall revenues. The management is optimistic about the increasing demand for electric vehicles (EVs) as businesses and individuals embrace cleaner energy alternatives. The company is expected to outperform the industry, thanks to its high-value and high-margin product portfolio in the segment.
Over the past six months, the company's shares gained 17 percent. In comparison, the benchmark Nifty 50 surged more than 13 percent over the same time period.
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