SONACOMS Q3 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
₹777 Cr
verified against source
Revenue YoY
13%
reported change
EBITDA
₹227 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Sona Comstar delivered its best-ever Q3 FY24 with INR 777 crore revenue (+13% YoY), INR 227 crore EBITDA (+22% YoY), and INR 133 crore PAT (+24% YoY). Margins expanded to 29.2% driven by operational efficiencies, favorable product mix, and lower material costs. BEV revenue reached INR 222 crore (30% revenue share), up 28% YoY. The company won 5 new BEV programs including spool gears for a global OEM's high-torque electric SUV and an Integrated Motor Controller for an Indian two-wheeler OEM. Net order book hit an all-time high of INR 240 billion with 79% EV content. Key headwinds include weak off-highway demand, temporary EV two-wheeler market disruption, INR 25 crore revenue loss from UAW strike (partially reversing in Q4), and potential Red Sea shipping disruptions. Management raised near-term EBITDA margin guidance to above 28%, up from the historical 25%-27% range, citing sustained operational improvements. North America remains the largest end market at 39% revenue share.
Colored figures show movement against the previous available record.
Guidance to track
- Management raised margin guidance from the historical 25%-27% range, citing sustained operational efficiencies, favorable product mix, and stable material costs with no indication of steel price increases to 2021 levels.
- Partnering with Equipmake for bus motors and controllers; currently in validation stage tuning motors for Indian conditions, with targeted serial production launch in late 2025 or early 2026.
- Out of 43 non-fully-ramped EV programs, most are expected to ramp up in calendar years 2024 and 2025, with only 1-2 programs expected later around 2026.
Risks flagged
- Off-highway market particularly in India has been weak with production declining further in Q3. Given high market share in this segment, differential gear and assembly sales have been materially impacted.
- Aggressive discounting by EV two-wheeler companies has temporarily disrupted the market and affected customer sales, impacting traction motor sales in Q3. Management expects this to continue for a few months but believes it is unsustainable beyond that.
- While current impact is negligible, prolonged crisis could lead to adverse effects due to longer shipping times (10-20-30 days), higher freight costs, and increased inventories. Europe deliveries most affected.
- Indian market is mixed across segments—passenger vehicles 'decent but not very plus', commercial vehicles expected to decline in 2024, and off-highway weakening further. India identified as the weakest of the three key markets.
Key quotes
- On a like-to-like basis, EBITDA margins have now been higher than our usual long-term range of 25%-27% for the last five quarters running, and we expect this to stay above 28% in the near term.
- This is clearly a case of narrative trumping data. EV sales grew by 31% last year in calendar, which is not slow. For us, based on customer schedules and our strong order book, we are certain that electrification will continue to drive strong growth in the immediate, in the medium, as well as the long term.
- The very short answer is no, because there is a lot of recency bias in the way we analyze information. This thing that has happened is only about one and a half months. In automotive industry, you are playing essentially long-term objectives with other long-term players. These things don't happen in haste. No one is coming to us and talking about pricing for motor.
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