Sona BLW Precision Forgings share price targets post Q1 results

Sona BLW Precision Forgings has been under the spotlight following the release of its Q1FY26 results. Despite challenges, the company continues to attract positive sentiments from several brokerages, who have provided their revised share price targets.

Nuvama has maintained a 'Buy' recommendation with a target price of Rs 560. "Order book is large at Rs 26,200 crore, including new orders for differential assembly and traction motors. We reckon FY25–28E revenue/Ebitda CAGR would be 17 per cent/14 per cent led by a large order book and Railways’ business buyout," said Nuvama, emphasising Sona's role in electrification both overseas and locally.

The brokerage highlighted the company's strategic focus on product development, which spans areas such as E-PV/CV traction motors and humanoid components, further supporting its growth trajectory.

The company's strategic product development, covering areas such as E-PV/CV traction motors and humanoid components, is also expected to support its growth. "Sona is working on product development across areas—E-PV/CV traction motors, eVTOL parts, humanoid components, radar sensors, etc. Furthermore, management is scouting for opportunities in the mobility space," noted Nuvama.

MOFSL attributed the impact seen in Q1 to several transient factors, including a change in supply terms by a European EV OEM and a global slowdown in EV demand. "Impact in Q1 was a function of multiple adverse factors," the firm stated, while pointing out that these issues are expected to normalise shortly.

Furthermore, MOFSL commented on Sona's growth potential, highlighting its ability to gain market share through new products despite current headwinds. "SONACOMS is poised for faster-than-industry growth, driven by content enhancement in the existing portfolio," MOFSL stated, though it retains a Neutral stance with a target price of Rs 468.

JM Financial highlighted the company's robust order intake, despite the challenging environment. "Despite challenging environment, Sona BLW received Rs 1,550 crore order from an existing NA customer for final drive differential assemblies," the firm remarked, revising its target to Rs 580 due to competitive pressures in the Chinese market.

ICICI Securities noted that Sona's Q1FY26 performance was slightly below expectations, with a 25 per cent year-on-year decline in BEV revenue due to weakened demand. "Sona BLW’s (SONA) Q1FY26 performance was slightly below our estimate," the brokerage stated, adjusting its target to Rs 500.

The stock's current trading context shows it facing pressures in the electric vehicle sector. However, the extensive order book, now about seven times the FY25 revenue, is seen as a positive indicator for potential recovery and growth in future quarters.

Despite these challenges, Sona BLW's recent joint ventures, particularly the one with China's Jinnaite Machinery, offer promising opportunities for expansion in the Chinese EV market, a significant target market for many global automotive players.

The company is also poised to benefit from ongoing electrification trends, which are expected to drive considerable market share gains as it expands its product portfolio and geographical reach.

Sona's engagement in the EPIC theme—electric, personalised, intelligent, and connected—highlights its commitment to future mobility solutions, aligning with global shifts towards sustainable and connected vehicle technologies.

Additionally, the newly acquired Railway business is projected to contribute substantially to overall revenue by FY28, with an expected revenue share of 20 per cent, according to Nuvama.

Market conditions, including tariff uncertainties and rare earth material shortages, continue to challenge the sector. However, the management's outlook remains optimistic, expecting these issues to stabilise over time.

As the company navigates these challenges, its strategic focus on expansion and product development continues to attract investor interest, with brokerages largely showing confidence in its long-term growth prospects.

Overall, brokerages are maintaining a cautious yet optimistic outlook on Sona BLW, underscoring the importance of its strategic initiatives and robust order book in mitigating near-term market pressures.