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Sonacomstar Sona BLW Share Price analysis is presented here with its Q2FY24 results which may be useful in selecting best stocks to invest in 2024 for long term.
Sonacomstar Sona BLW was established in 1995 and became leading automotive technologies company in India. Company is engaged in designing, manufacturing and supplying high quality automotive components such as assembly, gears, conventional and hybrid starter motors etc. which are useful in passenger vehicles, off highway vehicles, commercial vehicles, electric cars, electric two wheelers and electric three wheelers.
Company supplies its products across the globe including India, USA, Europe and China and have around 9 manufacturing units.
Company is consistently switching from traditional petrol and diesel vehicles to electric vehicles and increasing its revenue from E-Vehicle segment which is need of the hour and has bright future.
Its customers include 7 out of world’s top 10 passenger vehicle OEM, 3 out of top 10 commercial vehicle OEMs, 7 out of top 8 tractor OEMs. Ashok Leyland, CNH, Daimler, Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere, Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan are some of the key clients and may be considered in Sonacomstar Sona BLW share price analysis.
Sonacomstar (Sona BLW) is sector leader with around 6% of global market share in differential gears, 5% global market share of starter motor.
Mr Sunjay Kapur is the Chairman of the company. He completed BBA from the University of Buckingham in the United Kingdom and post-graduation from Harvard Business School in the Owner President Program.
Vivek Vikram Singh is the Managing Director and Group Chief Executive Officer of our Company having bachelor’s degree in technology in computer science and engineering from HBTI Kanpur and a postgraduate diploma in management from IIM Ahmedabad. With 18 years of experience, including eight years of experience in the automotive industry. He was awarded “Entrepreneurial CEO of the Year” by EY India in 2022 and was also adjudged by the Economic Times as one of India’s “40 under Forty hottest business leaders” in the awards’ 2018 edition.
Company is involved in Electric Vehicle segment which is a fancy sector at present and demand of the same may increase drastically in the future.
Company commands high Operating Profit Margin i.e. OPM which gives a competitive advantage to the company.
Further company also has a high Gross Profit Margin which gives it a good pricing power and these factors are good moats of the company.
FIIs & DIIs also have a decent stake in the company along with promoters with small public holding boosts confidence of investors.
Current shareholding pattern of the stock may be checked on following link:
Sonacomstar (Sona BLW) is almost debt free with debt to equity ratio below 1, which is very good sign. Investors should try to find stocks which are debt free for selecting the best stock to invest in 2024 for long term. Current Debt to Equity Ratio of the company may be checked by clicking on following link:
OPM indicates competitive advantage of the company in the sector. Company with more OPM than its competitor is considered better in the sector.
Therefore, current OPM of the company and its competitors may be compared for analysing Sonacomstar Sona BLW share price before selecting best stocks to invest for long term in 2024 on following link:
Gross Profit Margin indicates Pricing Power of the company. Company with more Gross Profit Margin is considered to have more Pricing Power.
Current Gross Profit Margin may be checked for analysing Sonacomstar Sona BLW share price before selecting best stocks to invest for long term in 2024 on following link:https://www.screener.in/company/SONACOMS/consolidated/
ROE refers Return on Equity which is calculated by dividing Net Income by Shareholders Equity while Growth refers to Sales & Profit growth. Usually the business is fundamentally sustainable when ROE is greater than Growth. If ROE is less than Growth, then to continue the Growth Company has to raise funds either by diluting equity or by taking debt which is usually considered as bad signal fundamentally.
Based on this concept investors can compare ROE and Growth to get insights of fundamental sustainability of the business. Current ROE and Growth of the company may be compared for analysing Sonacomstar Sona BLW share price before selecting best stocks to invest for long term in 2024 by clicking on following link:
After making sure that the company has good sales, profit and EPS growth, good ROE and ROCE, low debt, good promoter holdings along with interest of FIIs and DIIs, with good leadership, investors must analyse the correct valuation to enter in the stock.
Share Price is product of PE (Price to Earnings) and EPS (Earnings per Share).
Therefore, increase or decrease in share price is directly linked with increase or decrease in PE and EPS.
EPS is decided by actual financial performance of the company i.e. by its financial statement and hence EPS is a real and quantitative figure.
PE is decided by market and is inclusive of several factors such as market sentiments, growth, future prospects, macro-economic factors etc. and hence PE is a virtual and qualitative figure.
Low PE stocks have capability to increase the stock price by virtue of increase in both PE and EPS and such stocks becomes potential multibagger while high PE stocks have capability to increase the stock price by virtue of increase in EPS only and such stocks becomes potential Compounders.
It is also said that stocks with low market caps have more potential to increase than the stocks with very high and saturated market caps.
Technically it is recommended to buy a share if its price is below 200 DMA (Day Moving Average).
Therefore, current Market Cap, Sales Growth, Profit Growth, EPS Growth, ROE, ROCE, Stock PE, Sector PE, Competitor PE, Debt, Promoters holding, 200 DMA, 3 years Median PE may be checked for analysing Sonacomstar Sona BLW share price before selecting best stocks to invest for long term in 2024 on following link:
Some of the important factors to determine right PE is listed as following:
It is very important to enter the stock at right valuations. PE i.e. Price to Earnings Ratio is a parameter which gives insights of valuations of the company. PE Ratio of the company may be seen in comparison with its Growth and investors should invest at a reasonable PE.
PEG Ratio i.e. Price to Earnings Growth Ratio is also a good parameter to compare PE Ratio with Growth. PEG Ratio below 1 is considered as very good entry point. Risky investors even consider stocks up to PEG Ratio of 2.
Therefore, current PE Ratio and Growth may be compared for the stock to realize the optimum PE of the stock to enter and current PE Ratio, Growth and PEG Ratio may be checked for analysing Sonacomstar (Sona BLW) share price before selecting best stocks to invest for long term in 2024 by clicking on following link:
https://www.screener.in/company/SONACOMS/consolidated/
4. High PE sustainability with respect to Cash Flow & Growth:
Investors can even think of entering the stocks in high growth environment i.e. at PEG greater than 1 but they must analyse whether the high PE is sustainable or not.
High PE is sustainable in case of either high growth or even with low growth and positive cash flow because in case of low growth and positive cash flow if company gives dividend then share prices cannot fall after a certain point because that would increase dividend % drastically and sellers will stop selling resulting limited fall of share price.
For example, for a positive cash flow company, if share price is Rs 100 and dividend is Rs 10 i.e. 10% then it is very less likely to fall share price at Rs 50 due to fall in PE because then at Rs 50 share price, Rs 10 dividend would become 20% which is very less likely.
Therefore, investors must check PE and Growth along with Cash Flow if they are considering to enter in the stock at high PE.
Current PE, Growth and Cash Flow of the company may be checked for analysing Sonacomstar (Sona BLW) share price before selecting best stocks to invest for long term in 2024 by clicking on following link:
Sonacomstar (Sona BLW) has shown promising Q2FY24 results Investors must look on Q2FY24 results before selecting best stocks to invest in 2024 for long term. Brief overview of its Q2FY24 results are as following:
Parameter | QoQ | YoY |
Sales Growth | 7.6% | 20.5% |
Operating Profit or EBIDT Growth | 8.4% | 36.6% |
OPM | No change | 3% |
Net Profit | 10.7% | 33.3% |
EPS | 11% | 34.2% |
CNBC-TV18 Stocks Board | #SonaBLW posted a strong set of Q2 earnings with a revenue growth of over 20%. Brokerage firm CLSA has upgraded the stock to Outperform, while @JPMorgan and #Jefferies have a Neutral and Buy rating on the stock respectively. @_soniashenoy with details pic.twitter.com/oYlaOxN3m0
— CNBC-TV18 (@CNBCTV18News) October 26, 2023
Investors can track latest news and updates of Sonacomstar (Sona BLW) on its official website on following link:
https://sonacomstar.com/investor/annual-reports-and-returns
Sonacomstar (Sona BLW) NSE/BSE share price today, share price history, 52 week high/low may be checked on following link:
Investors may take their decisions wisely based on above mentioned moats and risks associated with Sonacomstar (Sona BLW) on reasonable valuation as described above.
Sonacomstar Sona BLW was established in 1995 and became leading automotive technologies company in India. Company is engaged in designing, manufacturing and supplying high quality automotive components such as assembly, gears, conventional and hybrid starter motors etc. which are useful in passenger vehicles, off highway vehicles, commercial vehicles, electric cars, electric two wheelers and electric three wheelers.
Company supplies its products across the globe including India, USA, Europe and China and have around 9 manufacturing units.
Company is consistently switching from traditional petrol and diesel vehicles to electric vehicles and increasing its revenue from E-Vehicle segment which is need of the hour and has bright future.
Ashok Leyland, CNH, Daimler, Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere, Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan are some of the key clients of Sona BLW.
Sonacomstar (Sona BLW) is sector leader with around 6% of global market share in differential gears, 5% global market share of starter motor.
Mr Sunjay Kapur is the Chairman of Sonacomstar.
Mr Sunjay Kapur has completed BBA from the University of Buckingham in the United Kingdom and post-graduation from Harvard Business School in the Owner President Program.
Mr. Vivek Vikram Singh is the Managing Director and Group Chief Executive Officer of Sona Comstar.
Mr. Vivek Vikram Singh is having bachelor’s degree in technology in computer science and engineering from HBTI Kanpur and a postgraduate diploma in management from IIM Ahmedabad.
Company is involved in Electric Vehicle segment which is a fancy sector at present and demand of the same may increase drastically in the future.
Sonacomstar (Sona BLW) is almost debt free with debt to equity ratio below 1.
Old name of Sonacomstar (Sona BLW) is Sona Okegawa Precision Forgings Limited.
Full name of Sonacomstar (Sona BLW) is Sona BLW Precision Forgings Limited.
This is only for education purpose and not an investment advice and the author is not SEBI registered, so investors must consult their professional financial adviser and do their own research before making any investment of their hard-earned money in Stock Market as Stock Market is subjected to Market Risk.
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