Boosted by robust railway orders and accelerating EV motor demand, Nuvama turns more optimistic on Sona BLW prospects.
Nuvama Institutional Equities has reaffirmed its ‘Buy’ rating on Sona BLW Precision Forgings and raised its target price to ₹570 from ₹550, citing a strong multi-year growth outlook. The upgrade is based on 45x/25x September 2027E EPS valuations for the company’s core and railway businesses. The brokerage has also increased its FY27E and FY28E Ebitda estimates by 2–9%, factoring in stronger-than-expected traction in Railways and traction motors.
Nuvama expects Sona BLW’s revenue and Ebitda to grow at a CAGR of 20 per cent and 17 per cent, respectively, between FY25 and FY28, supported by solid execution across its Motors, Railways and Driveline segments. The brokerage underscored that the company is positioned for robust double-digit growth, driven by the Railways business buyout and a healthy order book of ₹236 billion.
Further upside is anticipated as Sona BLW stands to benefit from fresh opportunities emerging after three European competitors—Winning BLW, Neapco Europe and AIMS—filed for bankruptcy. This has led to increased enquiries for its products, with new order wins expected within the next year and production likely to start in 2028. The potential opportunity is pegged at ₹25–30 billion.
In traction motors, Sona BLW is set for accelerated growth through new programmes with two-wheeler and three-wheeler OEMs. With 62 EV programmes across 32 customers, electric vehicles now make up 70% of its order book.
