Sona BLW Precision Forgings stock jumps over 6% on the back of strong Q2 results; should you buy, sell or hold the stock?

Sona BLW Precision Forgings shares zoomed on Thursday, October 26, after the auto component maker announced a strong set of financial results for the July-September period. The Sona BLW stock surged by Rs 25.9, or 5.2 per cent, to Rs 539.6 apiece at the strongest level in intraday trade on BSE.  

At around 10:00 am, Sona BLW Precision Forgings shares held on to the green, with a gain of 2.8 per cent at Rs 527 apiece. The stock ended 6.69 per cent higher on BSE at Rs 547.05 apiece.

After market hours on Wednesday, Sona BLW Precision Forgings registered a consolidated profit after tax (PAT) of Rs 124 crore for the second quarter of the current financial year as against Rs 93 crore for the corresponding period a year ago.  

Its revenue grew 20.5 per cent on a year-on-year basis to Rs 787 crore, according to a regulatory filing.  

The company registered a 36.6 per cent increase in earnings before interest, depreciation and amortisation (EBITDA) to Rs 220 crore.  

Sona BLW’s margin, a key measure of profitability, improved by 330 basis points (bps) to 27.9 per cent for the September quarter.  

"We achieved our highest revenue, earnings before interest, taxes, depreciation and amortization (EBITDA), and net profit. Battery Electric Vehicles (BEVs) revenue grew 58 per cent year-on-year to Rs 207 crore, representing 27 per cent of total revenue," said Sona BLW Precision Forgings MD and Group CEO Vivek Vikram Singh.  

Management commentary

In an exclusive interview with Zee Business, Vivek Vikram Singh, MD & CEO,  Sona BLW Precision said that the company is growing at 25-30 per cent compound annual growth rate (CAGR) and is adding new customers.

Further, he said that the company has around Rs 22,000 crore order book which will be executed within 10 years' timeline.

Talking about the company's growth in the Electric Vehicle (EV) segment he said that new additions have boosted growth and the company aims to 45 per cent share of EV in revenue by FY26.

Here's how brokerages rate Sona BLW Precision Forgings after the auto ancillary company’s strong earnings report: 

Sona BLW Precision Forgings share price: Past performance  

In 2023 so far, Sona BLW shares have gained 26 per cent, sharply outperforming a 3.9 per cent rise in the headline Nifty50 index. 

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