Auto Ancillary Series | Company Analysis

When an auto ancillary company says it is preparing for the electric-vehicle era, investors should ask a simple question:

Is the company actually changing its business, or is it only changing its presentation?

Sona BLW Precision Forgings Ltd., better known as Sona Comstar, provides an interesting case study because its EV transition is already visible in its products, revenue, order book and customer base.

The company started with precision-forged automotive components but has expanded into driveline systems, traction motors, sensors, software and other mobility technologies. Its FY2025-26 annual report says revenue reached ₹4,475 crore and adjusted PAT ₹670 crore, while BEV revenue was ₹1,154 crore. (sonacomstar.com, indiainfoline.com)

Let’s answer the 10 questions investors should ask.

1. What does Sona Comstar manufacture?

Sona Comstar is not simply a traditional gear manufacturer anymore.

Its major product areas include:

• Differential gears
• Differential assemblies
• Traction motors
• Motor controllers
• Starter motors
• EV drivetrain components
• Sensors and radar technology
• Software and semiconductor-related capabilities
• Railway components and systems

Its traditional strength is precision forging and drivetrain technology.

The company has gradually added electrical and electronic capabilities. Its acquisition of Comstar Automotive in 2019 brought starting, charging and electric-motor capabilities into the business. In 2023, it acquired a majority stake in NOVELIC, adding mmWave radar sensing and software capabilities. (sonacomstar.com)

This is important because the company is attempting to move from:

Mechanical components

→ electrified components

→ electronic systems

→ intelligent mobility technology

That is a much broader opportunity than simply supplying gears.

2. Who are its biggest customers?

Sona Comstar has a highly diversified global customer base.

According to recent company information, it supplies around 60 OEMs and Tier-1 customers worldwide, including major global passenger-vehicle, commercial-vehicle and tractor manufacturers, as well as EV manufacturers. (investorstack.in)

The company says its customer base includes:

• 7 of the world’s top 10 passenger-vehicle OEMs
• 3 of the world’s top 10 commercial-vehicle OEMs
• 7 of the world’s top 10 tractor OEMs
• 3 of the world’s top 10 EV OEMs
• 3 of India’s top 10 electric two-wheeler OEMs (investorstack.in)

More importantly, customer concentration has been falling.

The largest customer’s contribution reportedly declined from about 23% of revenue in FY2022 to around 6% recently, while the top five customers accounted for about 51%. (investorstack.in)

That diversification matters.

If one customer slows production, Sona Comstar is less vulnerable than it would have been when a single customer represented a much larger percentage of sales.

3. How dependent is Sona Comstar on ICE vehicles?

This is where the company becomes particularly interesting.

In FY2024-25, its automotive product revenue mix was approximately:

• 36% BEV
• 34% power-source neutral
• 21% hybrid/micro-hybrid
• 9% ICE-dependent

So only about 9% of automotive product revenue was directly ICE-dependent in FY2025. (sonacomstar.com)

And the FY2025-26 figure remained broadly similar: BEV products accounted for about 35% of automotive product revenue, while around 10% was described as ICE-dependent. (earningscanvas.in)

This is a significant change.

It means the company is not relying heavily on components that disappear when the internal-combustion engine disappears.

A large part of its business is either:

EV-compatible

or

powertrain-neutral

or

hybrid-related.

That reduces the structural ICE-to-EV risk.

4. What percentage of revenue comes from EV-related products?

This is one of the strongest parts of the Sona Comstar story.

In FY2024-25, BEV-related products contributed 36% of total product revenue, compared with 29% in FY2023-24.

BEV revenue increased 38% to approximately ₹1,224 crore. (sonacomstar.com)

In FY2025-26, BEV revenue was approximately ₹1,154 crore, representing about 35% of automotive product revenue. (sonacomstar.com)

Then came Q1 FY2026-27.

BEV revenue more than doubled year-on-year to approximately ₹435 crore, reaching 44% of automotive product revenue, the company’s highest-ever quarterly BEV revenue share. (investing.com)

So the trend looks like this:

The important point is not simply the 44% number.

It is the direction of travel.

5. When did management start preparing for EVs?

This is where Sona Comstar’s history becomes important.

The company says electrification has been part of its roadmap for nearly a decade.

Its timeline shows that in 2018, it won a differential-assembly contract from a global electric-vehicle manufacturer.

In 2019, it acquired Comstar, bringing electric-motor and charging/start-stop capabilities into the group.

In 2020, it won contracts to supply BLDC motors to two Indian electric two-wheeler manufacturers.

By 2022, it had crossed 100,000 traction motors produced.

In 2023, it acquired a majority stake in NOVELIC to add radar sensing and software capabilities. (sonacomstar.com)

So the EV story isn’t something that appeared suddenly in 2025.

The company began building capabilities several years before EVs became a mainstream investment theme in India.

That is a positive sign.

6. What actual investments has management made in EVs?

This is perhaps the most important question.

Management has invested in several areas.

Comstar acquisition

The 2019 acquisition brought electric-motor and charging-system capabilities into Sona Comstar. The transaction was explicitly described as creating an EV-focused automotive technology platform. (blackstone.com)

Traction motors

The company entered electric two- and three-wheelers with traction motors and inverters.

Manufacturing capacity

Sona Comstar has established manufacturing capabilities across India and overseas markets, with facilities supporting its motor and driveline businesses.

R&D

FY2024-25 R&D investment reached approximately ₹114 crore, up from ₹79 crore the previous year. (sonacomstar.com)

NOVELIC acquisition

The acquisition added mmWave radar sensing, software and semiconductor design capabilities.

New products

The company has developed:

• traction motors
• motor controllers
• EV differential assemblies
• reduction gears
• sensors
• radar systems
• suspension motors

It also started production of a Suspension Motor / Integrated Motor Controller Module during FY2024-25. (sonacomstar.com)

DENSO partnership

In July 2026, Sona Comstar announced a partnership with Japanese automotive technology company DENSO to develop, manufacture and sell electric and hybrid powertrain systems. This potentially expands its capabilities into higher-voltage electrified powertrains. (icicidirect.com)

So the company isn’t making one large EV bet.

It is building an ecosystem of EV technologies.

7. Are those investments generating revenue and orders?

This is where the story becomes more convincing.

The answer is yes.

In FY2024-25:

• BEV revenue increased 38%
• BEV revenue reached about ₹1,224 crore
• 4 new EV programmes were won
• 2 new EV customers were added
• EV programmes increased to 58
• EV customers increased to 32
• 77% of the ₹24,200 crore order book was linked to EV programmes. (sonacomstar.com)

By FY2025-26:

• 9 new EV programmes were won
• 3 new EV customers were added
• Total EV programmes reached 67
• EV programmes covered 35 customers
• The order book reached about ₹23,700 crore
• Around 70% of the order book was related to EV programmes. (indiainfoline.com)

And Q1 FY2027 provided another important signal.

BEV revenue jumped 107% year-on-year to about ₹435 crore and represented 44% of automotive product revenue. Overall revenue increased about 52% year-on-year to ₹1,301 crore, while PAT increased about 45% to ₹180.5 crore. (investing.com)

Therefore, this is no longer just an EV-capability story.

It has become an EV-revenue story.

8. Is the company’s financial performance improving?

Overall, yes—but investors should look beyond revenue alone.

FY2024-25

Consolidated revenue:

₹3,555 crore

EBITDA:

₹975 crore

PAT:

₹601 crore

Revenue grew 12%, EBITDA 8%, while PAT increased 16%. (sonacomstar.com)

FY2025-26

Revenue increased to approximately:

₹4,475 crore

EBITDA:

₹1,107 crore

Adjusted PAT:

₹670 crore

Revenue increased around 26%, EBITDA 13% and adjusted PAT around 11%. (sonacomstar.com)

Q1 FY2027

The momentum became even stronger:

Revenue: ₹1,301 crore
EBITDA: ₹303 crore approximately
PAT: ₹180.5 crore

Revenue grew more than 50% year-on-year and PAT rose about 45%. (investing.com)

But there is one warning.

The Q1 FY2027 EBITDA margin was about 23.1%, down from the previous year’s 23.8%, partly because of product mix and higher input costs. (investing.com)

So:

Growth = strong

EV growth = strong

Profit growth = strong

Margins = something investors need to monitor

9. What could make Sona Comstar lose its competitive advantage?

This is where investors need to challenge the bullish story.

Risk 1 — EV growth could slow

Sona Comstar is increasingly exposed to EV programmes.

If global EV adoption slows significantly, some expected programmes could be delayed.

The company experienced weakness in some US EV demand during FY2025-26, although diversification helped offset some of the impact. (indiainfoline.com)

Risk 2 — Customer concentration

Although concentration has improved significantly, the top five customers still represent a substantial portion of revenue.

A major customer delaying a platform or cancelling a programme can therefore affect revenue.

Risk 3 — Technology changes

EV technology changes quickly.

A company investing heavily in one motor, controller or drivetrain architecture could eventually find that technology replaced by something better.

Therefore:

R&D isn’t optional.

Risk 4 — Chinese competition

Chinese EV and component manufacturers have enormous scale.

If Chinese suppliers become more aggressive globally, pricing pressure could increase.

Risk 5 — Margin pressure

The company’s product mix is changing.

Traction motors and some newer businesses may carry different margins from its traditional precision-forged products.

Rapid growth doesn’t necessarily mean proportional profit growth.

Risk 6 — Execution

The company is moving into several areas:

EVs + sensors + software + railways + robotics + physical AI + new powertrain technologies.

That creates opportunities—but also execution risk.

The more businesses a company enters, the harder it becomes to allocate capital effectively.

10. At the current valuation, how much future growth is already priced into the stock?

This is probably the most important question for an investor.

As of August 27, 2026, Sona Comstar’s share price was around ₹819, with a market capitalisation of roughly ₹49,000–₹50,000 crore. (stockanalysis.com)

That is not a cheap valuation.

For perspective, FY2025-26 adjusted PAT was around ₹670 crore. At a roughly ₹49,500 crore market cap, the stock is trading at roughly 74 times FY2026 adjusted earnings.

Analyst estimates compiled by market-data services put FY2027 EPS around ₹13.3 and FY2028 EPS around ₹16.8. At ₹819, that corresponds to roughly:

FY2027 P/E ≈ 62x

FY2028 P/E ≈ 49x

These are still premium valuations. (twelvedata.com)

Another way to look at it:

If the company eventually earns ₹1,000 crore a year and the market gives it a 40x P/E, its market value would be about:

₹40,000 crore

That is actually below today’s market capitalisation.

Therefore, the market is clearly expecting much more than ₹1,000 crore of annual profit over time.

The current price appears to be pricing in a combination of:

• strong revenue growth
• continued EV adoption
• successful EV programme ramp-ups
• continued order-book growth
• successful international expansion
• technology-led diversification
• healthy margins
• successful execution of new businesses

This is why valuation is the biggest challenge in the Sona Comstar story.

Recent broker views illustrate the debate: Motilal Oswal had a ₹652 target and Neutral rating in July 2026, while Jefferies and Nomura had targets of ₹900 and ₹848 respectively. (moneycontrol.com)

So even analysts who like the business don’t necessarily agree on how much investors should pay for that future growth.

The Bigger Picture

Sona Comstar is an interesting example for our auto-ancillary series because it demonstrates what an actual EV transition can look like.

The company didn’t simply announce:

“We are entering EVs.”

Instead, the journey has involved:

2018
EV differential-assembly win

↓

2019
Comstar acquisition

↓

2020
BLDC motor orders from Indian EV manufacturers

↓

2022
Traction-motor production milestone

↓

2023
NOVELIC acquisition

↓

2024–25
BEV revenue reaches 36%

↓

2025–26
67 EV programmes across 35 customers

↓

2026
BEV revenue reaches 44% of automotive product revenue in Q1

↓

2026
DENSO partnership and expansion into high-voltage electric/hybrid powertrains

That is a meaningful transformation.

The Investor Takeaway

If we use our auto-ancillary checklist, Sona Comstar scores strongly on EV readiness.

The most interesting conclusion is therefore not simply:

“Sona Comstar is an EV company.”

It is:

Sona Comstar has already demonstrated that it can convert the EV transition into products, customers, orders and revenue. The bigger question for an investor today is whether future growth will be fast enough to justify the premium valuation.

That distinction is crucial.

A great company at an expensive price can still produce disappointing investment returns.

For Sona Comstar, the business transformation looks considerably more mature than it did a few years ago. The challenge now shifts from “Can management execute the EV transition?” to “Can management grow earnings fast enough to justify what the stock market is already expecting?”

Disclaimer: This article is for educational and informational purposes only and was generated with the help of AI using publicly available information. It is not investment advice, a recommendation to buy or sell any security, or a substitute for independent financial research. Stock prices, valuations, financial results and analyst estimates can change. Investors should conduct their own due diligence or consult a SEBI-registered investment adviser before making investment decisions.