Sona BLW Precision Forgings Limited

Sona Comstar delivered its best-ever quarterly performance in Q4 FY26, achieving record revenues, EBITDA, and PAT. Revenue grew by a strong 47% year-on-year to ₹1,272 crores, while EBITDA increased by 32% to ₹311 crores. Net profit also saw a 17% rise to ₹192 crores. The company's BEV revenue reached a historical high of ₹359 crores, accounting for 39% of its automotive revenue, demonstrating robust growth in the electrification segment despite a 28% decline in US EV sales.

The company faced several headwinds, including persistent inflation in major commodities, freight, packaging, and energy prices, which are expected to continue impacting margins. The recent increase in minimum wages in Haryana will also add to labor costs. To mitigate these, Sona Comstar is focusing on productivity improvements, tighter headcount control, and better workload management. Gas availability challenges were partially addressed by shifting part of the gas requirement to electric heating and optimizing gas flows, ensuring no production loss.

Electrification remains a key focus, with renewed urgency driven by energy security concerns. BEV sales in the EU grew 45% YoY in March, and electric cars and two-wheelers in India grew 65% and 45% respectively. The company secured 4 new driveline orders, including 3 from European OEMs and one for a hybrid platform, highlighting its capability to participate across various electrification paths. The total order book stands at ₹237 billion as of Q4 FY26, with EVs contributing 70%.

Sona Comstar's diversification strategy is yielding results, with Eastern markets now contributing 60% of revenues in Q4, up from 40% in the same quarter last year. This geographic diversification helped mitigate the impact of weakness in specific markets like North America PV sales. Product diversification is also evident, with the top eight products now contributing the same 86% of revenue that the top four did previously, indicating a broader revenue base. Newer products like traction and suspension motors are showing the fastest growth.

Significant progress was made in R&D, particularly in the newly acquired railway business. The company received approvals to supply electric panels and HVAC systems, expanding its offerings beyond safety-critical brake systems and couplers. These new products demonstrate strong capabilities in complex electronics and electromechanical systems. The HVAC market is estimated at ₹2,000-2,500 crores, and electric panels at ₹1,500 crores, with full market coverage expected in 12-15 months for panels and 3 years for HVAC.

The company ended FY26 with a strong balance sheet, holding ₹1,269 crores in cash and investments. Cash from operations was ₹659 crores, with a capex spend of ₹369 crores, resulting in free cash flow of ₹290 crores. Major cash movements included ₹1,800 crores for the railway business acquisition and ₹110 crores for land purchase. The company distributed ₹200 crores as dividends and added ₹226 crores in short-term borrowings. The adjusted PAT for FY26 was ₹670 crores, up 11% YoY.