1. At a Glance – Blink and You’ll Miss the Numbers
Sona BLW Precision Forgings Ltd (popularly called Sona Comstar) is trading at ₹456, packing a market cap of ₹28,357 Cr, flexing a Q3 FY26 revenue of ₹1,200 Cr (+38%) and PAT of ₹181 Cr (+16%), while the stock itself looks emotionally unavailable with -4.7% returns over 3 months. Classic case of “company running, stock jogging.”
The balance sheet is fitter than most auto ancillaries—debt of just ₹211 Cr, D/E at 0.04, ROCE 17.8%, ROE 14.4%, and an EBITDA margin north of 25%. Add a ₹23,100 Cr order book (78% EV) and suddenly everyone wants to call it a “structural compounding story.”
But here’s the twist: the market is already charging 43.5× earnings, EV/EBITDA ~24×, and Price/FCF a jaw-dropping 91×. This is not a discount grocery store. This is a Michelin-star valuation restaurant.
So the real question—is Sona Comstar a long-duration EV compounder… or a beautifully engineered valuation stress test?
2. Introduction – From Gears to Gigawatts
Once upon a time, Sona BLW was “that differential gear company.” Today, it’s a global auto-tech supplier with fingers in EV traction motors, starter motors, driveline systems, sensors, and software. If the automotive world is transitioning from ICE to electrons, Sona is selling the plumbing.
What’s impressive is not just growth—it’s how the revenue mix has shapeshifted. ICE-dependent revenue fell from 18% (FY22) to 9% (H1 FY25), while Battery EV jumped to 35%. That’s not dabbling; that’s commitment.
Geographically, North America now contributes 44% of revenue, India 28%, Europe 22%. Translation: this is no longer an India-only auto play; it’s a global OEM supplier with diversified risk—unless the entire planet stops buying vehicles at once.
Yet, promoters have been quietly reducing their stake (from 33% to ~28%). No pledging, no panic selling—but enough to make governance hawks raise an eyebrow.
So, are we looking at India’s answer to
a Bosch-style EV supplier, or just another case of “great company, scary price”?
3. Business Model – WTF Do They Even Do?
Imagine explaining Sona Comstar to your lazy but smart friend:
“They make the stuff that makes vehicles move—whether powered by petrol, diesel, or Elon Musk’s dreams.”
More formally, Sona designs and manufactures mission-critical driveline and motor systems for OEMs. These are not optional parts. If Sona messes up, the vehicle doesn’t move. That’s pricing power.
Core Buckets:
- Differential Gears & Assemblies – Still the cash cow (nearly 60% combined).
- Starter Motors & Micro-Hybrid Systems – ICE + mild hybrid bridge tech.
- EV Traction Motors – The future child everyone is betting on.
- Sensors & Software – Courtesy the NOVELIC acquisition.
They operate 11 plants across India, Europe, Mexico, China, USA, supported by R&D centers in India and Serbia. Annual R&D spend ~2% of revenue, with plans to push it higher—rare discipline for an Indian auto ancillary.
Ask yourself: how many Indian companies sell drivetrain tech to global OEMs across ICE and EV at scale? Exactly.
4. Financials Overview – Numbers Don’t Lie, They Just Smirk
Result Type Detected: QUARTERLY RESULTS (Q3 FY26)
EPS annualisation locked accordingly.
Quarterly Comparison Table (₹ Cr)
| Metric | Latest Q3 FY26 | Q3 FY25 | Q2 FY26 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 1,200 | 868 | 1,138 | 38.2% | 5.4% |
| EBITDA | 296 | 234 | 284 | 26.5% | 4.2% |
| PAT | 150 | 129 | 170 | 16.3% | -11.8% |
| EPS (₹) | 2.43 | 2.26 | 2.78 | 7.5% | -12.6% |
EPS Annualisation
