Brokerages CLSA and Jefferies have turned cautious on Sona BLW Precision Forgings following a disappointing Q1FY26 performance, driven by EV segment weakness, rare-earth supply issues, and operating pressures. While both retain their positive stance, they have flagged risks to near-term growth and cut earnings estimates.
CLSA on Sona BLW share: BEV revenue drops 25% YoY, rare-earth supply constraints hurt
Rating: Outperform | Target Price: ₹566
CLSA highlighted that Sona BLW’s EBITDA margin in Q1 was slightly below estimates, impacted by negative operating leverage and an unfavourable product mix. The company reported a 5% YoY decline in revenue, with battery electric vehicle (BEV) revenue falling 25% YoY, driven by:
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Changes in supply terms with a European EV customer
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Lower volumes from a large EV client
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Rare-earth magnet supply constraints affecting traction motor production
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Ongoing uncertainty linked to US tariffs on EV imports
Despite these headwinds, CLSA maintained an ‘Outperform’ rating, acknowledging the long-term potential in electrification.
Jefferies on Sona BLW share: Weak Q1, cuts FY26–28 EPS by up to 19%
Rating: Buy | Target Price: ₹515 (revised down)
Jefferies said Q1 EBITDA declined 19% YoY, broadly in line with expectations, but flagged weak earnings visibility in the near term. The weakness was attributed to:
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Volume decline at a key OEM
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Supply-side disruption in rare-earth magnets
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Global EV industry slowdown exacerbated by tariff uncertainty
The brokerage cut its FY26–28 EPS estimates by 13–19%, though it believes new opportunities such as:
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Entry into China,
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Benefits from its railway business acquisition, and
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Alternative motor design developments
may offer strategic buffers against near-term challenges.
Summary of brokerage views on Sona BLW:
| Brokerage | Rating | Target Price | Key Commentary |
|---|---|---|---|
| CLSA | Outperform | ₹566 | BEV revenue down 25% YoY, margin pressure due to mix and rare-earth constraints |
| Jefferies | Buy | ₹515 (↓) | EBITDA fell 19% YoY, earnings visibility weak, EPS cut by up to 19% |
Disclaimer: This article is based on brokerage reports and is for informational purposes only. It does not constitute investment advice. Investors should consult their financial advisors before making investment decisions.
