HDFC Securities has initiated coverage of Sona BLW Precision Forgings Ltd. (Sona Comstar) with an ‘Add’ rating and a target price of ₹845, citing rising electric vehicle (EV) penetration, strong research and development, and an expanding technology-led product pipeline. The brokerage believes the company is entering an important growth phase as global and Indian automakers accelerate efforts. Sona BLW EV Growth
EV Order Book Signals Strong Future Growth
The biggest catalyst behind the Sona BLW EV Growth story is the rapid increase in EV-related orders. EV programs accounted for 64% of Sona BLW’s net order book at the end of Q1 FY27, compared with just 26% of its FY26 revenue.
The gap highlights the potential for EV programs to contribute a significantly larger share of revenue as existing orders move into production. Sona BLW already has a strong position in traction motors for India’s electric two- and three-wheeler segments and is developing high-voltage traction motors for passenger vehicles, opening another major growth opportunity.
However, HDFC Securities expects increased domestic traction motor supplies could create some pressure on margins. Despite this, the brokerage believes the long-term EV opportunity outweighs the near-term margin risk.
Expanding Product Pipeline Adds New Growth Engines
Another key factor supporting Sona BLW EV Growth is the company’s expanding product portfolio. HDFC Securities highlighted investments in R&D, acquisitions, and technology partnerships as important contributors to its growing addressable market.
The brokerage identified suspension motors, sensors, and radar systems, along with products developed through the Denso joint venture, as potential medium-term growth drivers. These businesses could benefit from stricter vehicle safety regulations, including emerging ADAS requirements for commercial vehicles and tougher safety standards in Europe.
Global Customers Strengthen Competitive Position
Sona BLW’s diversified global customer base provides another advantage. The company supplies seven of the world’s top 10 passenger vehicle manufacturers, three of the top 10 commercial vehicle makers, seven of the top 10 tractor OEMs and three of the top 10 EV manufacturers.
HDFC Securities expects ongoing China+1 and Europe+1 sourcing strategies to create opportunities for additional customer wins and higher content per vehicle.
Risks Investors Need to Watch
While the Sona BLW EV Growth outlook remains positive, the brokerage highlighted several risks. Rising domestic traction motor supplies could put some pressure on margins, while geopolitical tensions, tariff changes, and promoter-related factors could affect the company’s performance.
What Drives Sona BLW’s EV Growth?
Overall, HDFC Securities’ bullish view rests on three major factors: a rapidly expanding EV order book, a broader technology and product pipeline, and a strong global customer base. With EV programs already dominating its order book, Sona BLW EV Growth could become an increasingly important contributor to the company’s long-term revenue and earnings potential.
Related Articles:
