Capitaline

Results 28-Jul-23

Analysis

Sona BLW Precision Forgings

Revenue from Battery EV grew 13% YoY

For the quarter ending June 2023, consolidated Net sales (including other operating income) of Sona BLW Precision Forgings has increased 25.18% to Rs 731.38 crore compared to quarter ended June 2022.Operating profit margin has jumped from 23.54% to 27.70%, leading to 47.29% rise in operating profit to Rs 202.60 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 45.90% to 43.76%. Employee cost decreased from 7.35% to 6.64%. Other expenses fell from 23.21% to 22.22%.

Other income rose 2.67% to Rs 6.15 crore. PBIDT rose 45.43% to Rs 208.75 crore. Provision for interest rose 84.78% to Rs 5.34 crore.

PBDT rose 44.62% to Rs 203.41 crore. Provision for depreciation rose 27.62% to Rs 51.06 crore.

Profit before tax grew 51.38% to Rs 152.35 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 37.47 crore, compared to Rs 24.8 crore. Effective tax rate was 25.06% compared to 24.64%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 47.73% to Rs 112.04 crore.

Promoters’ stake was 29.76% as of 30 June 2023 ,compared to 67.18% as of 30 June 2022 .

Full year results analysis.

Net sales (including other operating income) of Sona BLW Precision Forgings has increased 25.85% to Rs 2655.01 crore. Operating profit margin has declined from 25.51% to 25.43%, leading to 25.48% rise in operating profit to Rs 675.24 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 45.94% to 45.11%. Employee cost decreased from 7.84% to 6.90%. Other expenses rose from 21.23% to 22.16%.

Other income fell 21.52% to Rs 32.17 crore. PBIDT rose 22.15% to Rs 707.41 crore. Provision for interest fell 7.28% to Rs 16.93 crore. Loan funds rose to Rs 295.19 crore as of 31 March 2023 from Rs 151.15 crore as of 31 March 2022. Inventories declined from Rs 363.38 crore as of 31 March 2022 to Rs 322.94 crore as of 31 March 2023. Sundry debtors were higher at Rs 608.85 crore as of 31 March 2023 compared to Rs 445.19 crore as of 31 March 2022. Cash and bank balance declined from Rs 77.25 crore as of 31 March 2022 to Rs 69.84 crore as of 31 March 2023. Investments rose to Rs 232.57 crore as of 31 March 2023 from Rs 6.53 crore as of 31 March 2022 .

PBDT rose 23.11% to Rs 690.48 crore. Provision for depreciation rose 25.38% to Rs 178 crore. Fixed assets increased to Rs 1,033.73 crore as of 31 March 2023 from Rs 860.19 crore as of 31 March 2022. Intangible assets declined from Rs 671.32 crore to Rs 645.02 crore.

Profit before tax grew 22.34% to Rs 512.48 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 113.81 crore, compared to Rs 70.63 crore. Effective tax rate was 22.35% compared to 16.34%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 9.34% to Rs 395.30 crore.

Equity capital increased from Rs 584.35 crore as of 31 March 2022 to Rs 585.41 crore as of 31 March 2023. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 33.00% as of 31 March 2023 ,compared to 67.18% as of 31 March 2022 .

Cash flow from operating activities increased to Rs 533.29 crore for year ended March 2023 from Rs 444.58 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 335.24 crore, compared to Rs 347.21 crore during the year ended March 2022.

Other Highlights

Board has approved investment of Rs 99.7 crore for capacity expansion of the Chennai plant from 400,000 to 600,000 EV traction motors, and a new capacity of 500,000 units of PCB Assembly, by financial year 2025.

In Q1 FY24, net order book increased to Rs 22,000 crore. EVs programs contribute 78% to the net order book.

Revenue from Battery EV grew 13% YoY to Rs 184 crore in Q1 FY24 and contributed 26% of total revenue.

Company added 4 new BEV programs and one new custome Q1 FY23.

In Q1 FY24, company received an order from an Indian two-wheeler OEM to supply hub-wheel traction motors for their upcoming electric scooter model. This program has added Rs 360 crore to its order book. The production is likely to commence in Q4 FY24.

Company signed a technology licensing agreement with Equipmake, a UK-based technology company that has developed high-performance electric powertrains. Under the agreement, Equipmake will license certain patented spoke motor and inverter technology in the power range of 100kW to 440 kW to Sona Comstar to manufacture and sell EV Powertrains, sub-systems, and components for electric cars, buses, commercial vehicles and off-road vehicles. Sona Comstar has exclusive rights to sell drive motors, inverters, and drivetrains for the target applications in the licensed territory of India, Thailand, and select South Asian markets.

In Q1 FY24, North America contributed 43% to total revenue, India 28%, Europe 23%, Asia 5% and ROW 1%.

In Q1 FY24, PV contributed 72% to total revenue, CV 15%, OHV 10% and E2W/E3W 3%.

Management Comments :
Mr Vivek Vikram Singh, MD & Group CEO, commented: "We achieved our highest-ever quarterly EBITDA in Q1 FY24. Our revenue grew 24% y-o-y, driven mainly by the scale-up of the new customer programs. The reduction in FAME-II subsidies has resulted in lower production by the electric two-wheelers industry, thus impacting our traction motor sales. Despite this, our BEV revenue grew 13% y-o-y, representing 26% of overall revenues. EBITDA margin improved by 360 bps y-o-y to 27.8%, driving EBITDA growth of 43% and PAT growth of 48%. We have continued to progress on all our key strategic priorities. With four new BEV program wins, our net order book grew to Rs. 22,000 crores, of which EVs contribute 78%. Last quarter, we won a new program to supply the hub[1]

wheel traction motor for electric scooters from an Indian OEM of Electric and ICE two-wheelers. In addition, we won a new program to supply the differential assembly for electric Class 5 trucks from a North American OEM of electric CVs. We entered a new mobility segment by winning a new program from a global OEM to supply final drive differential assemblies for recreational off-highway vehicles (OHVs). We have made substantial progress on our technology roadmap by partnering with a road-tested technology partner in Equipmake to enter the high-voltage motor and inverter space."

Sona BLW Precision Forgings : Consolidated Results

	Quarter ended			Year ended
Particulars	202306	202206	Var.(%)	202303	202203	Var.(%)
Net Sales (including other operating income)	731.38	584.25	25.18	2,655.01	2,109.68	25.85
OPM (%)	27.70	23.54	416 bps	25.43	25.51	-8 bps
OP	202.60	137.55	47.29	675.24	538.14	25.48
Other Inc.	6.15	5.99	2.67	32.17	40.99	-21.52
PBIDT	208.75	143.54	45.43	707.41	579.13	22.15
Interest	5.34	2.89	84.78	16.93	18.26	-7.28
PBDT	203.41	140.65	44.62	690.48	560.87	23.11
Depreciation	51.06	40.01	27.62	178	141.97	25.38
PBT	152.35	100.64	51.38	512.48	418.9	22.34
Share of Profit/(Loss) from Associates	0	0	-	0	0	-
PBT before EO	152.35	100.64	51.38	512.48	418.9	22.34
EO Income	-2.84	0	-	-3.37	13.27	PL
PBT after EO	149.51	100.64	48.56	509.11	432.17	17.80
Taxation	37.47	24.8	51.09	113.81	70.63	61.14
PAT	112.04	75.84	47.73	395.3	361.54	9.34
Minority Interest (MI)	0	0	-	0	0	-
Net profit	112.04	75.84	47.73	395.3	361.54	9.34
P/(L) from discontinued operations net of tax	0	0	-	0	0	-
Net profit after discontinued operations	112.04	75.84	47.73	395.3	361.54	9.34
EPS (Rs)*	1.95	1.30	50.54	6.80	5.99	13.55

* EPS is on current equity of Rs 585.42 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

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