Citi has maintained its Buy rating on Sona BLW Precision Forgings Ltd. (Sona Comstar) but lowered the target price to ₹570 from its previous estimate. The brokerage highlights Sona’s strong order book as a key differentiating factor among Indian B2B automotive component manufacturers. However, Citi warns of near-term risks that could affect the company’s growth trajectory.
The two major concerns cited are:
- Slower global demand, which may impact incremental orders.
- Possible delays in existing orders, affecting revenue visibility.
Despite these challenges, Citi remains positive on Sona’s long-term outlook, citing its diverse product portfolio and strong order pipeline. The brokerage has trimmed its earnings estimates as well as lowered its valuation multiple from 45x to 42x to account for the near-term headwinds. However, the strong EV and drivetrain portfolio makes it a key player in the evolving automotive sector.
