CLSA has maintained its outperform rating on Sona BLW Precision Forgings with a target price of ₹570 per share following a strong Q2FY26 performance that exceeded expectations on margins.
The company reported an EBITDA margin of 25.3%, exceeding estimates by 228 basis points despite a 17% year-on-year decline in battery electric vehicle (BEV) revenue and the integration of its lower-margin railway business. Revenue rose 24% year-on-year, supported by growth in non-EV segments and steady export traction.
CLSA said Sona highlighted that three of its direct competitors in Europe have filed for insolvency amid challenging conditions, which could open new order opportunities for the company. The brokerage expects Sona to gain incremental share in Europe given its strong balance sheet, cost competitiveness, and diversified product portfolio.
It added that despite temporary BEV weakness, long-term prospects remain robust due to rising electrification trends globally and the company’s strong pipeline in differential gears and driveline solutions.
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