Sona BLW: Gearing back up, valuation full

研报英文原文证据摘录

Sona BLW: Gearing back up, valuation full

Venugopal Garre +65 6326 7643 venugopal.garre@bernsteinsg.com 3 July 2026

DETAILS

INVESTMENT IMPLICATIONS

With the growth mix improved and diversification increased, we raise our target to Rs660, from Rs540. We continue to maintain

Market-Perform. The stock, in our view, is now fairly priced and does not offer sufficient upside from here to justify a more

constructive rating.

We would turn constructive if we see the newer businesses - railways, sensors, radar, or even robotics - scale and ramp up

faster than currently modelled, or if margin pressure from the ongoing program launches proves more transient than we expect

Valuation methodology: Our target of Rs660 is DCF-based implying a forward PE multiple of 48x/38x - FY27E/FY28E. The

increase from our previous Rs 540 target primarily comes from a higher near-medium term revenue growth assumption. DCF

calculations are based on FY38 as terminal year, 5% terminal growth and an 11% WACC; the new-focus-area products are

treated as optionality and are not in the target.

We assume 20% revenue growth in FY26-30E, after which revenue growth CAGR declines to +16% in FY30-37E. Revenue

growth estimates for the entire period is hence estimated at 18% CAGR (FY26-37E). EBITDA margins are estimated to settle at

24-25%. Much of the target price increase has come from increase in revenue growth estimates from 18% earlier to 20% now

(FY26-30E)

Model Changes: We raise our revenue estimates for FY27/FY28 by 4.2%/8.8% respectively. Consequently, EBITDA estimates

also increase by 2%/4.2% respectively. Change in EBITDA is lower compared to changes in revenue driven by our revised lower

EBITDA margins.

EXHIBIT 1: Change in FY27/FY28 estimates

Change in estimates Mar-26 Mar-27E Mar-28E