Sona BLW: Stock rose after results, what is the advice for investors now?

News Topical, Digital Desk : Shares of Sona BLW Precision Forgings, an auto component company listed on the BSE 500, have seen a rise and the stock closed at 447 with a gain of about one percent at the end of trading. During the session, the stock also crossed the 455 level. Today's rise in the stock has been seen after the company's quarterly results. The company has released its results just a day ago.

What is the opinion of the brokerage house

CLSA has maintained an outperform rating on the stock and has given a target price of Rs 566 per share, meaning that the stock can rise by 27% from the current price. According to the report, EBITDA margin was slightly weaker than expectations. The company's total income declined by 5%. The main reason for this was a change in supply terms with a European electric vehicle company and lower volumes from a major customer. Along with this, the shortage of rare earth magnets affected the production of traction motors. CLSA also expressed concern over tariff instability related to the US. Jefferies has also given a Buy rating on Sona BLW, but has reduced the target to Rs 515 per share. According to the report, the first quarter was weak and EBITDA declined by 19% year-on-year, which was in line with estimates. Key reasons include a decline in volumes of a large OEM, a shortage of rare earth magnets and a slowdown in demand due to tariffs. Jefferies believes that the company can get support from entry into China, benefits from railway business acquisition and efforts to reduce dependence on rare earth. How were the company's results? The company's profit has declined by 12.2% to Rs 124.7 crore as compared to last year. At the same time, income through business decreased by 4.2% to Rs 854 crore, which was Rs 893 crore in the same quarter last year. EBITDA has fallen by 17.4%. At the same time, EBITDA margin also decreased to 24.1%. It is worth noting that Sona BLW shares have fallen by more than 25% since the beginning of this year. 

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