Motilal Oswal Maintains Buy Call on SONA BLW Precision Forging with Target Price of Rs 546

Motilal Oswal Raises Earnings Estimates for SONA BLW Precision Forging

SONA BLW Precision Forging, a leading precision forging company, has reported a consolidated profit after tax (PAT) of INR1.9 billion for the fourth quarter of fiscal year 2026 (4QFY26). This exceeds the research firm Motilal Oswal's estimated PAT of INR1.8 billion, driven by better-than-expected revenue growth.

The revenue beat was primarily attributed to a significant increase in business equipment and vehicle (BEV) revenue in 4Q. Based on this performance, Motilal Oswal has increased its earnings estimates for SONA BLW Precision Forging by 1% and 6% for fiscal year 2027 (FY27E) and fiscal year 2028 (FY28E), respectively.

However, the research firm remains cautious about the global auto demand slowdown and a slower-than-expected electric vehicle (EV) transition in key markets. This could pose execution challenges for SONA BLW Precision Forging, despite its healthy order backlog. The stock's valuation at 49x and 42x of FY27E and FY28E, respectively, appears to factor in most of the positives for the company.

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Earnings Estimates Comparison

Motilal Oswal maintains a Neutral rating for SONA BLW Precision Forging with a target price of INR546, equivalent to 38x of fiscal year 2028 earnings per share (EPS).