SAMIL, Bharat Forge, Sona Comstar shares: Kotak flags earnings risk, expensive valuations
Kotak finds valuations expensive, as it retained 'Sell' call on Bharat Forge and SAMIL and 'Reduce' rating on Sona BLW Precision.
- Dec 10, 2025,
- Updated Dec 10, 2025 11:40 AM IST
Kotak Institutional Equities in a fresh note on domestic auto component makers said the global automotive outlook for 2025–26 remained weak, with softness in the US and only a modest recovery in the EU posing downside risks for players with sizable overseas exposure.
The domestic brokerage said earnings for Samvardhana Motherson International Ltd (SAMIL), Bharat Forge and Sona BLW Precision Forgings Ltd (Sona Comstar) could remain under pressure, citing muted demand indicators across light vehicles, commercial vehicles and off-highway segments worldwide.
Kotak finds valuations expensive, as it retained 'Sell' call on Bharat Forge and SAMIL and 'Reduce' rating on Sona BLW Precision. The brokerage noted that the recent stock run-ups on expectations around the India–US trade deal were unwarranted, as tariff relief would provide only marginal benefits in an otherwise weak global environment.
Kotak said US demand trends pointed to a soft 2026 outlook across major automotive segments, driven by tariff-led price inflation, high financing costs and a reset in EV demand. Light-vehicle volumes were expected to weaken, Class 8 trucks remained in a downcycle with soft freight and elevated inventories, and off-highway equipment demand stayed muted as contractors absorbed excess fleets. Farm machinery was set for another year of decline given weak sentiment and tight credit conditions.
Kotak sees fair value of SAMIL at Rs 95 apiece, Bharat Forge at Rs 1,025 per share and Sona Comstar at Rs 500 apiece.
The brokerage said EU markets were likely to see gradual recovery in CY2026 from a weak base, though momentum would remain uneven. Passenger vehicles were expected to grow in low single digits, led by electrified models, even as Chinese OEMs continued to gain share from European players. The commercial-vehicle segment was expected to stabilise as freight rates firmed and demand improved in FMCG and infrastructure end-markets. Tractor and off-highway segments were expected to recover gradually, weighed by elevated financing costs and patchy demand trends.
Kotak said commentary from global OEMs supported a cautious stance. Western OEMs faced weakness in China’s premium-car segment amid intensifying competition from Chinese BEV makers, while global CV companies reported persistent softness in the US and limited visibility in Europe. The brokerage noted that for Indian suppliers such as Bharat Forge, SAMIL and Sona Comstar, the India–US trade deal offered only a small uplift, which would be overshadowed by subdued end-market conditions and slower-than-expected recovery in customer demand across geographies.
Kotak Institutional Equities in a fresh note on domestic auto component makers said the global automotive outlook for 2025–26 remained weak, with softness in the US and only a modest recovery in the EU posing downside risks for players with sizable overseas exposure.
The domestic brokerage said earnings for Samvardhana Motherson International Ltd (SAMIL), Bharat Forge and Sona BLW Precision Forgings Ltd (Sona Comstar) could remain under pressure, citing muted demand indicators across light vehicles, commercial vehicles and off-highway segments worldwide.
Kotak finds valuations expensive, as it retained 'Sell' call on Bharat Forge and SAMIL and 'Reduce' rating on Sona BLW Precision. The brokerage noted that the recent stock run-ups on expectations around the India–US trade deal were unwarranted, as tariff relief would provide only marginal benefits in an otherwise weak global environment.
Kotak said US demand trends pointed to a soft 2026 outlook across major automotive segments, driven by tariff-led price inflation, high financing costs and a reset in EV demand. Light-vehicle volumes were expected to weaken, Class 8 trucks remained in a downcycle with soft freight and elevated inventories, and off-highway equipment demand stayed muted as contractors absorbed excess fleets. Farm machinery was set for another year of decline given weak sentiment and tight credit conditions.
Kotak sees fair value of SAMIL at Rs 95 apiece, Bharat Forge at Rs 1,025 per share and Sona Comstar at Rs 500 apiece.
The brokerage said EU markets were likely to see gradual recovery in CY2026 from a weak base, though momentum would remain uneven. Passenger vehicles were expected to grow in low single digits, led by electrified models, even as Chinese OEMs continued to gain share from European players. The commercial-vehicle segment was expected to stabilise as freight rates firmed and demand improved in FMCG and infrastructure end-markets. Tractor and off-highway segments were expected to recover gradually, weighed by elevated financing costs and patchy demand trends.
Kotak said commentary from global OEMs supported a cautious stance. Western OEMs faced weakness in China’s premium-car segment amid intensifying competition from Chinese BEV makers, while global CV companies reported persistent softness in the US and limited visibility in Europe. The brokerage noted that for Indian suppliers such as Bharat Forge, SAMIL and Sona Comstar, the India–US trade deal offered only a small uplift, which would be overshadowed by subdued end-market conditions and slower-than-expected recovery in customer demand across geographies.