Sona BLW Precision Forgings slips in trade amid large deal news; what should be your strategy?

Sona BLW Precision Forgings shares were under pressure during Wednesday’s session on the exchanges on the back of news that one of the company’s promoters has decided to sell a 3.25 per cent equity stake at a 7 per cent discount to Tuesday’s closing price of Rs 533 per share.

An automotive systems and components manufacturing company – Sona BLW shares tumbled more than 5 per cent to touch the day’s low level of Rs 505.25 per share on the BSE today. At around 12:20 PM, it was trading near its day’s low level at Rs 507.55 apiece, down 4.78 per cent on the BSE.

According to Zee Business research analyst Arman Nahar, Sona BLW’s promoter Aureus Investment Pvt Ltd is likely to have sold a 3.25 per cent stake in the auto components maker through a block deal on Wednesday at the price of Rs 500 a share.

As of March 2023 end, Aureus Investment held a 33 per cent stake in Sona BLW Precision Forgings as per the shareholding pattern of the company.

Sona BLW Q4 Results

In the January-March quarter of the financial year gone by, Sona BLW Precision on May 3, 2023, posted a 35 per cent year-on-year (YoY) growth in revenue to Rs 744  crore and the profit grew by 54 per cent YoY to Rs 120 crore, while its EBITDA (earnings before interest, taxes, depreciation, and amortisation) stood at Rs 201 crore, up 49 per cent YoY with a margin of 27.1 per cent.

ICICI Securities gives ‘buy’ call

Domestic brokerage firm ICICI Securities notes that Sona BLW recorded its highest quarterly revenue, driven by an increase in EV (electric vehicle) orders, as Battery EV revenue grew 37 per cent YoY, resulting in a revenue mix of 28 per cent during the quarter.

The brokerage says the new e-CV (electric commercial vehicle) export order has kickstarted Sona’s journey in the global e-CV segment after it already established a significant presence in e-PVs. ICICI Securities maintained a ‘buy’ rating with a target price of Rs 573 per share.

Sona BLW share price history

Sona BLW shares dipped nearly 9 per cent in the last one year as compared to around a 12 per cent rise in the Nifty50 index. So far in 2023, the stock has risen over 21 per cent against more than a 1.5 per cent surge in the benchmark index.