Jefferies cuts Sona BLW price target to INR515 from INR565 on weak Q1

Published 05/08/2025, 06:54
Jefferies cuts Sona BLW price target to INR515 from INR565 on weak Q1

Investing.com - Jefferies has lowered its price target on Sona BLW Precision Forgings (SONACOMS:IN) to INR515.00 from INR565.00 while maintaining a Buy rating on the stock.

The price target reduction follows what Jefferies described as a "weak" first quarter for the precision components manufacturer, with EBITDA falling 19% year-over-year, in line with Jefferies’ estimates.

The earnings decline was attributed to multiple factors including volume decline at a key OEM customer, constraints in rare earth magnets, and a slowdown related to tariffs, according to Jefferies.

Despite the near-term earnings visibility being characterized as weak, Jefferies highlighted several positive factors that could provide cushioning, including Sona BLW’s entry into the Chinese market, anticipated full benefits from a railway business acquisition, and the development of an alternate motor design to address rare earth constraints.

Jefferies has cut its earnings per share estimates for Sona BLW by 13-19% for fiscal years 2026 through 2028, while maintaining its Buy rating but noting it keeps the stock "low in pecking order."

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