SONACOMS Q2 FY24 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹787 Cr
verified against source
Revenue YoY
20%
reported change
EBITDA
₹223 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Sona Comstar delivered its highest-ever quarterly revenue of INR 791 crore (+20% YoY) and EBITDA of INR 223 crore (+35% YoY), with PAT at INR 128 crore (+39% YoY). BEV revenue surged 58% to INR 207 crore, representing 27% of total sales. The order book expanded to INR 221 billion with 78% EV content. Management added two new EV programs (North American high-performance OEM and Indian three-wheeler OEM for traction motors) and completed the NOVELIC sensors acquisition. Management targets EBITDA margins of 25-27% for the medium term and expects traction motor revenue share to continue growing. Key risks include potential EV adoption slowdown affecting order conversion timelines and the ongoing UAW strike impact on North American operations, though management indicated the strike is nearing resolution. The company is setting up a Mexico subsidiary to serve North American customers.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintained its stated range for the medium term. Anything above 27% is considered upside. This is consistent with guidance given since IPO.
- Two wins announced - North American high-performance OEM (rotor-embedded differential sub-assembly) and Indian three-wheeler OEM (traction motors) - will begin serial production in FY2025.
- Two programs launching with two big European OEMs expected to drive geographic diversification and increased revenue share from Europe starting 2025-26.
Risks flagged
- The UAW strike in the US reached day 40 during the call. Management acknowledged some financial impact but stated the effect was not very high. They estimated INR 791 crore would have been exceeded without the strike.
- Analyst raised concerns about EV adoption slowing globally and potential push-out of order conversion timelines from 3-year targets. Management acknowledged risk but noted new age EV customers represent single digits of revenue.
- Analyst noted BEV revenue excluding traction motors has been flattish for past several quarters. Management attributed Q1 depression and Q2 makeup to step-function growth patterns and lack of new program launches in those specific quarters.
- Historical CapEx ratios of $1:2 revenue for driveline and $1:5-6 for motors may face pressure as new EV programs ramp up, especially for Mexico subsidiary investment.
Key quotes
- We will like to remain in the range of 25%-27% for the medium term. Anything more is great, but that's our target range.
- We have more than doubled our revenues every three years since FY 2016. FY 2019 over 2016, 2020 over 2017, 2021 over 2018, and so forth. This resolute performance, despite any external events, is because of our tremendous team.
- Our revenue has grown by 20% year-over-year, whereas light vehicle sales in our key markets of North America, India and Europe grew by only 14%.
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