Sona BLW Precision Forgings Limited (Sona Comstar) has reported its highest-ever quarterly revenue, EBITDA, and net profit in Q2, demonstrating resilience amid global challenges. The auto component manufacturer saw significant growth across key financial metrics, expanded its order book, and made strides in technological innovations.

Financial Highlights

Operational Performance

Despite facing headwinds, Sona Comstar showed strong performance across various segments:

• BEV revenue declined by 17%, now constituting 32% of automotive revenue
• Growth primarily driven by trains, tractors, and traction motors
• Railway segment, off-highway segment, and electric two-wheelers showed significant growth

Order Book and New Wins

The company's order book stands at ₹236 billion after a strategic review:

• EV programs maintain a 70% share of the order book
• Secured first order for Mexico driveline plant worth ₹2.6 billion
• Received nominations for two suspension system programs valued at ₹8.2 billion

Technological Advancements

Sona Comstar has made significant progress in its technology roadmap:

• Successfully developed rare-earth-free traction motors using ferrite-assisted synchronous reluctance technology
• Collaborated with Neura Robotics of Germany to develop advanced components for robots, cobots, and humanoids

Market Diversification

The company has actively diversified its revenue mix:

• India became the largest end market, accounting for 45% of revenue in H1
• North America contributed 30% to the revenue
• For the first time, eastern markets revenue surpassed that from western markets

Challenges and Responses

Sona Comstar faced several challenges during the quarter:

• Demand challenges from a global customer, particularly affecting one specific model
• Shortage of heavy rare-earth magnets impacting EV traction motor production
• Uncertainties regarding USA tariffs persisting

In response, the company:

• Shifted to alternative motor designs not relying on heavy rare-earth magnets
• Developed rare-earth-free motors for electric three-wheelers and light commercial vehicles
• Continued to focus on cost optimization and efficiency improvements

Future Outlook

While not providing specific guidance, management expressed optimism about future growth prospects:

• Expects opportunities to emerge from global market consolidation
• Anticipates significant new orders from European customers in coming quarters
• Views the railway segment as a promising growth area

Vivek Vikram Singh, MD and Group CEO, commented, "Our performance in this quarter underscores the first part of the anti-fragility hypothesis. We believed that many weaker players may not survive this disorder, while strong companies with technology moats and bulletproof financial foundations like ours would consolidate and grow over the medium term."

As Sona Comstar continues to navigate global challenges, its focus on innovation, diversification, and operational excellence positions it well for future growth in the evolving automotive and mobility landscape.

Sona BLW Precision Forgings Ltd. (Sona Comstar), a leading mobility technology company, has announced its financial results for the second quarter of fiscal year 2026, showcasing robust growth and strategic initiatives. However, recent developments have raised concerns about potential revenue impacts.

Recent Developments

Sona BLW's deal with BYD has been canceled, with analysts warning of potential significant revenue impact. This development may affect the company's future growth projections and market position.

Financial Highlights

Despite the recent setback, Sona Comstar reported its highest-ever quarterly revenue, EBITDA, and net profit in Q2 FY26. The company's performance for the quarter ended September 30, 2025, is as follows:

The company's revenue from Battery Electric Vehicles (BEV) constituted 32% of total automotive product sales, although it experienced a 17% decline compared to the same quarter last year.

Strategic Updates

Sona Comstar expects gradual improvement in return ratios through growth initiative investments. Following its railway acquisition, the company aims to achieve profit margins in the range of 24-26%.

The company has successfully developed, tested, and validated Rare Earth Free Motors for electric vehicle applications. This technological advancement may provide supply chain security and improved thermal capabilities.

In a significant business development, Sona Comstar has been nominated for two additional programs to supply motors and motor controllers for predictive active suspension systems in Asia and Europe. The company also received its first order from its new driveline plant in Mexico to supply differential assemblies to an OEM in the USA.

Management Commentary

Mr. Vivek Vikram Singh, MD & Group CEO, commented on the results: "We achieved our highest-ever quarterly revenue, EBITDA, and net profit in Q2 FY26. Our revenue grew by 24% year-on-year, primarily driven by the expansion of our electric vehicle traction motor and railway business in India."

He further added, "We have developed a rare-earth-free ferrite-assisted synchronous reluctance motor for three-wheelers and light commercial vehicles. It was also a successful quarter for business development as we won several significant new orders."

Future Outlook

While Sona Comstar maintains a no future guidance policy for FY26 and FY27 plans, the company's focus on technological advancements and strategic partnerships indicates a positive trajectory. The company's partnership with Neura Robotics to jointly develop advanced components and technologies, with a focus on industrializing robots, cobots, and humanoids in India and other markets, may open new avenues for growth.

The company's net order book stands at ₹236.00 billion (6.8x FY25 revenue), with 70% of it coming from EV programs, suggesting a strong pipeline for future growth.

However, the recent cancellation of the deal with BYD may impact these projections, and the company may need to reassess its strategies in light of this development.

As Sona Comstar continues to navigate the evolving mobility landscape, its focus on electrification, global market significance, and technology diversification may position it well for future opportunities in the automotive and mobility sectors, despite recent challenges.