Our 40th company in the Series of Best Stocks to Buy in India for Short term 2023 is Sona BLW Precision Forgings Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Sona BLW Precision Forgings is an India-based automotive technology company. The Company is engaged in designing, manufacturing and supplying engineered automotive systems and components.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹26,805cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 74.14
Sector PE Ratio: 139.55
PE Ratio of this company is low than Sector’s PE. So it’s a Below Average PE than the peers of this company.
PB Ratio : 13.40
Sector PB Ratio : 5.82
PB Ratio of this company is high than Sector’s PB ratio. So it’s Average PB than the peers of this company.
Dividend Yield : 0.34%
Sector Dividend Yield : 0.60%
Dividend Yield of this company is low than Sector. Dividend of this is Below Average than the peers of this company.
ROE: 17.91%
ROCE: 19.48%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average.
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2022 | 2,163.94 | 361.55 |
| 2021 | 1,568.64 | 215.16 |
| 2020 | 1,275.82 | 360.34 |
| 2019 | 775.78 | 172.96 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2022 | 2021 | 2020 | 2019 |
| 595.46 | 821.97 | 672.76 | 1,456.35 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2022 ,Company have 595.46Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2022 | 2021 | 2020 | 2019 |
| 97.37 | -76.22 | 41.28 | 12.84 |
Debt Level: Sona BLW has more cash than its total debt.
Reducing Debt: Sona BLW’s debt to equity ratio has reduced from 6597% to 8.3% over the past 5 years.
Debt Coverage: Sona BLW’s debt is well covered by operating cash flow (257.9%).
Interest Coverage: Sona BLW earns more interest than it pays, so coverage of interest payments is not a concern.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2022 | 53.59% | 11.56% | 21.03% | 3.50% | 10.32% |
| Mar 2022 | 67.18% | 8.80% | 14.22% | 1.90% | 7.90% |
| Dec 2021 | 67.18% | 8.79% | 14.22% | 2.26% | 7.61% |
| Sep 2021 | 53.59% | 9.77% | 14.21% | 1.76% | 7.08% |
Above table showing there is no big change in Promotor Holding which is 53.59% in June 2022. FIIs invested in June 2022 with 11.56% and retail investor is 10.32% .
Investment Checklist for Sona BLW Precision Forgings Ltd
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The company is currently profitable
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Earnings are forecast to grow by an average of 35.5% per year for the next 3 years
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Debt level is low and not considered a risk
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Dividend is too low to be a concern
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Share price has been stable over the past 3 months
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The company’s earnings are high quality
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Profit margins improved or Sona BLW became profitable
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They have sufficient analyst coverage
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Shareholders have not been meaningfully diluted in the past year or recently listed
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Revenue is meaningful (₹23B)
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Market cap is meaningful (₹268B)
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Sona BLW does not have negative shareholders equity.
According to its historical performance we can predict stock target.
[membership_protected_content user=non-member]
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 400 to 430
Target: 600 (40% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 40th company in the Series of Best stocks to buy in India for short term 2023. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss.