Sona Comstar Q4 Results: Clocks Highest Quarterly Revenue, Profit On EV Play

Sona BLW Precision Forgings Ltd. (Sona Comstar) has clocked its highest quarterly revenue and profit in the fiscal fourth quarter, as growth in the electric vehicle business gathered steam.

Consolidated net profit of the auto components maker rose 24% over the year-ago period to Rs 149 crore in the quarter-ended March 31, 2024, on the back of revenue that rose 19% year-on-year to Rs 885 crore, according to an exchange filing on Tuesday.

Analysts polled by Bloomberg had estimated the top line and the bottom line at Rs 841 crore and Rs 138 crore, respectively.

• Revenue up 19.05% at Rs 884.1 crore (Estimate: Rs 841 crore).

• Ebitda up 23.17% at Rs 248.04 crore (Estimate: Rs 239.80 crore).

• Ebitda margin up 93 basis points at 28.05% (Estimate: 28.5%).

• Net profit up 23.62% at Rs 148.1 crore (Estimate: Rs 138.04 crore).

Note: One basis point is one-hundredth of a percentage point.

Separately, the company has declared a final dividend of Rs 1.53 per share.

For the full fiscal, net profit of the Gurugram-based company rose 31% over the previous year to Rs 517 crore in FY24, on the back of revenue that increased 19% to Rs 3,185 crore.

Operational profitability—measured as the earnings before interest, tax, depreciation and amortisation—jumped 30% to Rs 902 crore, even as the company enjoyed a profitability margin of 28.3%.

That outperformance was courtesy a singular focus on the EV business.

In the quarter-ended March 31, 2024, revenue from the EV business rose 34% year-on-year and made up 32% of the company’s top line. For the full fiscal, the EV business grew 32% year-on-year and made up 29% of the top line. Of the 27 EV programmes in the order book, 11 are matured and ramped up.

With 39 new deal wins and five new customer additions, the net order book rose 5% year-on-year to Rs 22,600 crore, as on March 31, 2024. EVs contributed 79% to the net order book. The company added Rs 5,100 crore in new orders in FY24.

“We closed FY24 with a strong order book, which gives us the confidence to sustain growth momentum in FY25 and beyond,” Vivek Vikram Singh, group chief executive officer at Sona Group, said in the statement. “Overall, we added 12 new EV programmes and four new EV customers during the year, further growing and diversifying our EV order book.”

But, there are challenges.

The off-highway market in India and the US has been weak, so much so that production declined further in the fiscal fourth quarter, according to the company. Tractor sales in both these markets were at their lowest in April-June 2020—the first quarter of the pandemic.

“So, given our high market share in this segment, this has affected the sales of differential gears and differential assemblies to this particular segment,” CEO Singh said, during a post-earnings analyst call. “Second, the electric two-wheeler market in India faces uncertainty over subsidy. This is impacting the sales of our traction motors. We expect this to continue for a few more months till there is some more policy certainty.”

The Red Sea crisis, coupled with surging crude oil prices, has resulted in higher freight rates. That impacted margin in the fourth quarter.   

Separately, Sona Comstar has appointed Praveen Rao, head of the firm’s motor business, as its new chief technology officer. He replaces Kiran Deshmukh, who has decided to retire after four decades at Sona Group.

Operationally, Sona Comstar during January-March repurposed its facility in China to stop making starter motors and focus on traction motors and suspension motors.

On Tuesday, Sona Comstar shares fell 1.69% to Rs 625.60 apiece on the BSE, even as the benchmark Sensex ended the day 0.25% lower at 74,482.78 points. The quarterly results were declared after market hours.