Sona BLW Precision Shares 2024 Rally 10%, Escorts Kubota Stock Tanks 10%, Here’s Why

Shares of Sona BLW Precision Forgings Ltd Sona Comstar experienced a significant rally, climbing over 10% in Thursday’s trading session. This surge follows the company’s announcement regarding its acquisition of the Railways Equipment Division from Escorts Kubota for ₹1,600 crore. Analysts view this acquisition as EPS-accretive, indicating that it adds value to earnings per share, which has positively influenced investor sentiment.

Sona BLW Precision Shares 2024

Conversely, shares of Escorts Kubota plummeted nearly 10% after the announcement. The company aims to align its operations with the vision of Global Kubota and exit non-core businesses, leading to a revision of earnings estimates for the future. Despite this setback, analysts maintain a positive outlook for Escorts Kubota’s medium-term prospects, bolstered by potential support from Global Kubota in terms of technology and export opportunities.

WhatsApp Channel Join Button

Sona BLW Precision Shares Overview

Attribute
Information
Current Share Price
₹709.80 (up 10.48%)
Market Reaction
Positive following acquisition announcement
Previous Close Price
₹643.50

Sona BLW Precision Shares Acquisition Details

Detail
Information
Acquired Division
Railways Equipment Division
Acquisition Amount
₹1,600 crore
Expected Contribution
17% to FY27E revenue

Sona BLW Precision Shares Analyst Ratings

Analyst
Rating
Nuvama
Buy
Target Price
₹780

Sona BLW Precision Shares Financial Metrics

Metric
FY26E Value
EV/Ebit Valuation
7 times
RoCE
35%

Sona BLW Precision Shares Growth Indicators

Indicator
Growth Percentage
PAT Growth YoY
20% in 2QFY25
Revenue CAGR (FY24-27E)
17%
EPS CAGR (FY24-27E)
20%

Sona BLW Precision Shares Trading Performance

Trading Day
Price Change (%)
October 24, 2024
+10.48%
Previous Day Close
₹643.50

Sona BLW Precision Shares Market Sentiment

Sentiment
Description
Investor Confidence
High due to positive acquisition outlook
Market Volatility
Influenced by geopolitical scenarios

Sona BLW Precision Shares Competitor Comparison

Company
Current Share Price
Price Change (%)
Sona BLW Precision
₹709.80
+10.48
Escorts Kubota
₹3,345.15
-9.65

Sona BLW Precision Shares Valuation Metrics

Metric
FY25E/FY26E Value
P/E Ratio
60 times/48 times
Target Price (MOFSL)
₹685

Sona BLW Precision Shares Earnings Forecast

Forecast Period
EPS Forecast
FY25E
₹11.50
FY26E
₹14.60

Sona BLW Precision Shares Investment Risks

Risk Factor
Description
Geopolitical Impact
May affect operations in key geographies
Competitive Pressure
From other players in the EV and railway segments

Sona BLW Precision Shares Summary of Analyst Opinions

Analyst Firm
Opinion
MOFSL
Neutral with a target price of ₹685
Nuvama
Buy with a target price of ₹780

Sona BLW Precision Shares Future Outlook

Outlook
Description
Medium-Term Growth
Expected revenue/EPS CAGR of 17%/20%
Strategic Positioning
Diversification into the Railway sector

Sona BLW Precision Shares Summary

Sona BLW Precision shares have shown robust growth, spurred by strategic acquisitions and strong earnings performance. The market’s positive reaction indicates confidence in the company’s direction, especially in the growing EV segment. Meanwhile, challenges faced by competitors like Escorts Kubota underline the potential risks in a volatile market environment. Investors are encouraged to monitor developments closely as they could impact future share performance.

WhatsApp Channel Join Button