SONACOMS - Sona BLW Precis.

📊 NSE: SONACOMS 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 13:35

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 12% YoY to INR 35,545.35 million in FY 2024-25. Q2 FY26 revenue grew 24% YoY to INR 11,435 million. Battery Electric Vehicle (BEV) revenue declined 17% YoY in Q2 FY26, contributing 32% to automotive revenue. The newly integrated Railway business reported pro-forma revenue of approx. INR 9,500 million for FY 2023-24.

Geographic Revenue Split

Not disclosed in available documents, though management noted global industry challenges and infrastructure slowdown in India due to general elections.

Profitability Margins

Net Profit (PAT) margin was 16.9% in FY 2024-25, up from 16.3% in FY 2023-24. Q2 FY26 PAT margin was 14.9%, impacted by a 0.6% reduction due to lower EBITDA transmission. Standalone profit for FY 2024-25 was INR 5,796.88 million.

EBITDA Margin

Consolidated EBITDA margin was 27.4% in FY 2024-25, a decrease from 28.3% in FY 2023-24. Q2 FY26 EBITDA margin was 25.3%, down 2.3% YoY primarily due to product mix and operational leverage from the railway business integration.

Capital Expenditure

The company spent INR 198 crores on CAPEX in H1 FY26. Additionally, INR 110 crores was spent on land purchase in Faridabad for future expansion of the railway business. Total cash outflow for the Railway and NOVELIC acquisitions aggregated to nearly INR 1,700 crore.

Credit Rating & Borrowing

Interest Coverage Ratio was 27.5 in FY 2024-25. Net Debt to Equity was -0.48 (net cash position) following a QIP of INR 23,695 million. Finance costs for FY 2024-25 were INR 301.73 million, up from INR 257.98 million.

⚙️ Operational Drivers

Raw Materials

Manufacturing expenses include sub-contracting costs, stores and spares, and power and fuel. Specific raw materials like steel or copper are not explicitly named with cost percentages, but production focuses on differential gears, differential assemblies, and traction motors.

Capacity Expansion

Production capacity is being expanded for differential gears, differential assemblies, and traction motors. Land in Faridabad (INR 110 Cr) was purchased specifically for expanding the Railway business capacity.

Raw Material Costs

Manufacturing expenses increased in FY 2024-25, with depreciation rising 16% to INR 2,544 million due to new property, plant, and equipment additions for capacity expansion.

Manufacturing Efficiency

Inventory turnover ratio improved to 10.2 in FY 2024-25 from 9.5 in FY 2023-24. Working capital turnover was 5.0.

Logistics & Distribution

Selling and distribution expenses are included in 'Other expenses', which totaled INR 28,638.31 million (including manufacturing and admin) in FY 2024-25.

📈 Strategic Growth

Expected Growth Rate

19%

Growth Strategy

Growth is driven by the acquisition of the Railway Equipment Division of Escorts Kubota (closed June 1, 2025), which offers a 19% historical revenue CAGR. The company is launching new products including HVAC systems, electrical control panels, and automatic plug doors for railways. Expansion is also supported by a QIP of INR 23,695 million for M&A and capacity ramp-up.

Products & Services

Differential gears, differential assemblies, traction motors, railway brakes, couplers, suspension systems, friction and rubber products, and HVAC systems.

Brand Portfolio

Sona Comstar, NOVELIC (acquired).

New Products/Services

New railway products include HVAC systems, electrical control panels, vacuum evacuation systems, and automatic plug doors. BEV share of automotive revenue is 32%.

Market Expansion

Expansion into the railway sector via acquisition and land purchase in Faridabad. Management aims to become a global mobility technology leader.

Market Share & Ranking

The company is amongst the leaders in railway brakes, couplers, and suspension systems in India.

Strategic Alliances

Acquisition of the Railway Equipment Division of Escorts Kubota Limited and the final tranche payment for the NOVELIC acquisition.

🌍 External Factors

Industry Trends

The industry is transitioning from ICE to electrified alternatives (BEV share at 32%). The railway sector is seeing growth through new product R&D and infrastructure spending.

Competitive Landscape

The company faces both domestic and international competition in the mobility and railway technology sectors.

Competitive Moat

Moat is built on technology leadership in precision forgings and traction motors, and a strong market position in railway components (brakes/couplers). The company received the 'Best Governed Company' award from ICSI, reinforcing its governance moat.

Macro Economic Sensitivity

The CV segment was impacted by a slowdown in infrastructure activities linked to India's general elections and government transition.

Consumer Behavior

Shift toward electric two-wheelers and three-wheelers continues despite the end of FAME-II subsidies.

Geopolitical Risks

Global industry challenges and macro stormy conditions were noted by management as significant headwinds in recent quarters.

⚖️ Regulatory & Governance

Industry Regulations

Operations are affected by the discontinuation of the FAME-II subsidy and stringent environmental standards for ICE and EV products.

Environmental Compliance

The company is subject to stringent environmental and regulatory standards in the mobility industry; specific ESG costs are not disclosed.

Taxation Policy Impact

The effective tax rate for FY 2024-25 was approximately 24.8% (INR 1,986.47 million tax on INR 7,983.35 million PBT).

Legal Contingencies

The company states there are no material departures from applicable accounting standards. No specific pending court cases or values are disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

The transition from ICE to BEV poses a risk to ICE-dependent lines. BEV revenue is sensitive to customer concentration (17% decline due to one model). Global macro volatility and regulatory changes are also key risks.