Sona BLW Precision Forgings Limited

Sona Comstar achieved its best-ever quarterly performance in Q3 FY26, with revenue reaching ₹1,209 crores, a 39% year-on-year growth. EBITDA stood at ₹305 crores, increasing by 30% YoY, while adjusted PAT grew 20% YoY to ₹181 crores. The EBITDA margin for the quarter was 25.2%, a slight decrease of 1.8% YoY primarily due to product mix changes. For the nine-month period, revenue grew 19% YoY to ₹3,203 crores, with EBITDA and PAT increasing by 8% and 9% respectively, maintaining robust margins around 25%.

The company demonstrated significant strategic agility and diversification. North America, previously the largest market in FY25, saw its contribution nearly halve, while India's revenue mix doubled. Despite these shifts, the company maintained its growth and margins. Eastern markets now contribute 58% of total revenues, up from 33% last year, and non-automotive revenues increased to 31% in the first nine months of FY26 from 9% in FY25, showcasing successful market and product diversification.

The EV business showed strong resilience and growth, with BEV revenues increasing 21% quarter-on-quarter and the BEV mix expanding to 38% in Q3 from 32% in Q2. This performance is particularly noteworthy given a sharp 45% QoQ and 36% YoY decline in North America EV market volumes. The company's diversified EV model, with 64 programs across 33 customers (33 in production), helped maintain BEV revenues, which were only 3% down YoY despite the challenging market conditions.

Sona Comstar's net order book stands at ₹235 billion as of Q3 FY26, with a significant 71% attributed to EV programs. The RFQ (Request for Quote) pipeline is at its strongest in the company's history, almost three times larger than the previous year, indicating high future demand. Approximately one-third of this increased pipeline originates from European customers, driven by competitors' financial difficulties, presenting a substantial opportunity for market share gains.

The company continues to strengthen its R&D roadmap with new product introductions. This quarter saw the addition of Air Springs for railway coaches, which will quadruple the addressable market in suspension systems, and a Hydraulic Motor Controller for farm equipment. In ADAS, Sona Comstar is leveraging its NOVELIC vertical for millimeter-wave radar solutions, with a Chennai production facility. They are developing in-cabin (DDAWS) and exterior (180-degree field of view) radar systems, aiming to support OEM programs from FY27 onwards.

Management confirmed that commodity costs for steel (in some contracts), copper, and aluminum are largely pass-through for driveline and motor businesses, which helps mitigate margin pressure. However, pass-through mechanisms can numerically depress reported margins. The company also incurred a one-time^📎 impact of ₹30 crore on PAT in Q3 FY26 due to new labor codes, with an estimated recurring annual impact of ₹4 crores (₹1 crore per quarter).