Sona Blw Precision Forgings Ltd Share Price

Sona BLW Precision Forgings Ltd overview

Sona BLW Precision Forgings Ltd's journey

• 1995: The company is incorporated as Sona Okegawa Precision Forgings Ltd - a joint venture with Mitsubishi Metal Corporation Limited.
• 1998: Production of differential bevel gears commences in Gurugram, Haryana.
• 1999: Sona launches a new manufacturing plant in Chennai, Tamil Nadu.
• 2005: The firm launches a manufacturing plant in Pune, Maharashtra. Sona Autocomp Holding Private Limited becomes a majority shareholder.
• 2008: Acquires Thyssen Krupp’s precision forging business. Thyssen Krupp acquired BLW – the inventor of the Warm Forging Technology.
• 2013: The company changes its name to Sona BLW Precision Forging Ltd. The company launches an assembly and finishing plant in Tecumseh, USA.
• 2016: Sona launches a final assembly and finishing plant in China. JM Financial Trustee invests in Sona. The technical know-how agreement with Mitsubishi is terminated.
• 2018: The company acquires a new piece of land at Chakan, Pune to establish a second plant. It receives the contract for differential assembly supply from a reputed Electric Vehicle Manufacturer.
• 2019: The transaction with Blackstone-affiliated company – Singapore Topco is complete. Comstar Entities is acquired by the firm. “Sona Comstar” is adopted as a brand name.
• 2020: The company reaches a milestone of producing 250 million gears. It receives contracts from two electric 2-wheeler manufacturers based in India.
• 2021: The IPO launches and stocks are listed on BSE and NSE.

Sona BLW Precision Forgings Ltd - Initial Public Offer (IPO)

Sona BLW Precision Forgings Ltd’s products

• Differential bevel gears
• Starter motors
• Differential assembly
• Belt starter generators
• Inter-axle gear sets
• Portal axle gears
• Couplings/sleeves
• Traction motors
• Integrated motor controller modules
• Drive motors
• Hub wheel motors
• e-Axles
• Spool gears

Sona BLW Precision Forgings Ltd business highlights

• Gears - 25%
• Micro-hybrid starter motors – 26%
• Assembly – 27%
• Conventional starter motors – 17%

Sona BLW Precision Forgings Ltd performance highlights

Sona BLW Precision Forgings Ltd management

• Chairman (Non-Executive): Sanjay Kapur
• Chief Executive Officer (CEO): Vivek Vikram Singh
• Chief Finance Officer (CFO): Rohit Nanda
• Investor Relations: Ajay Pratap Singh

Indian automotive components industry overview

Size of the Indian automotive components industry

• In the last few years, the growing working population and increasing income of the middle class in India have contributed to the increase in the demand for two-wheelers and four-wheelers. This has created an increase in the demand for automotive components.
• Turnover of the automobile component industry in FY2021-22 stood at ₹4 lakh crore.
• From FY2018-19 to FY2021-22, it had a growth of 23%.
• The export of automobile components for FY2021-22 stood at ₹1.41 lakh crore.

Industry growth prospects

• The demand for two-wheelers and four-wheelers is on the rise. As per the Automobile Component Manufacturers Association (ACMA), the auto component industry is expected to reach USD 200 billion in terms of revenue.
• The export of automobile components from India is expected to reach USD 30 billion by the year 2026.
• The rise in the demand for electric vehicles (EVs) is going to fuel this demand further. It is believed that by 2025, four million EVs will be sold each year. The government has launched Production Linked Incentive Schemes for the sector with expected investments to the tune of ₹74,850 crore in the next five years. 100% FDI is allowed for the auto component sector.

Sona BLW Precision Forgings Ltd growth prospects

Sona BLW Precision Forgings Ltd is focusing on electrification, diversification and technology.It is working towards increasing its global market presence.The existing demand for the component supply to passenger and commercial vehicles and the new demand for electric vehicles, is anticipated to drive the demand for the products of the company.The firm is currently working on 37 electric vehicle programs with 23 of its customers.

Risks and concerns

• Demand slowdown, especially from the European Union and China, is expected to affect the sales volume. It may affect the Sona BLW stock price.
• Geo-political tensions can adversely affect the availability and prices of raw materials, which can affect the supply and profitability of the company.
• Adoption of EVs is becoming slower, which can affect the demand for the company’s products and affect Sona BLW's share price.
• Rising interest rates, fuel prices and raw material prices, in general, can affect the demand for vehicles. Consequently, this may adversely affect the demand for automobile components.

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