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EV Firm to Expand its Presence under Global EV Boom

Sona Comstar posted revenue of ₹657 crore in the September quarter, up 12% from the year earlier

by Aishwarya Saxena

Indian electric automotive systems and parts maker Sona BLW Precision Forgings Ltd (Sona Comstar) has planned to double the share of its global electric vehicle business to 45%-50% of revenue by 2025.

Sona Comstar The company currently earns about 25% of its revenue from supplies to battery electric vehicle (BEV) makers in the key markets of Europe, North America, China and India.

Sona Comstar posted revenue of ₹657 crore in the September quarter, up 12% from the year earlier, including a 6% rise in revenue for its BEV business at ₹131 crore. Net profit rose 5% from a year earlier to ₹93 crore during the quarter.

Earnings before interest, taxes, depreciation and amortization (Ebitda) stood at ₹166 crore, with an Ebitda margin of 25.2%.

However, with a large footprint in Europe, which is facing an economic slowdown and, China, which is facing continued uncertainty due to covid, businesses for diversified auto parts makers such as Sona Comstar could suffer near-term headwinds.

“Europe is our third-largest market and the macro headwinds there will impact our business in the short term. China is uncertain for the foreseeable future. However, our two largest markets, India and the US, are more than making up for the softer demand in Europe,” said Vivek Vikram Singh, chief executive, Sona Comstar.

“We are banking on the EV business, which is on an upward trajectory globally, and region-wise, we are a well-diversified company. So, the sales slowdown in one market will not alter our growth trajectory. Overall, I am optimistic that we will register stronger growth than the industry as we have been doing. While the industry growth has remained somewhat flat, our order book has grown,” he said.

“What was in our hands was to set up the company’s valuation for the IPO and fixing the issue price at ₹291 apiece. We had committed to growth and we have delivered. What happens beyond this, to the stock price movement, is not something that can be determined by a company. As management, we can only keep focusing on building and growing the business,” said Singh.

“Q2 FY23 was the best quarter in the company’s history as we reported the highest quarterly revenue, and profits. We have also introduced four new products since our IPO in 2021, including the Spiral Bevel Gear in the previous quarter. Our net order book has grown from ₹13,600 crore to ₹20,500 crores in the last 12 months. Our strategic plans are oriented towards a 10-year timeframe, and it has so far delivered strong results,” he added.

“We understand that the stock price is very important for investors, and we are committed to creating value for shareholders. Pressure is always a privilege for us, and we believe that by pursuing our strategic business priorities we will be able to create value for customers as well as other stakeholders in the long run,” he added.

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