Sona Comstar BLW - Direct EV Play

@shahzad248 lower half of Page 19 here : https://www.bseindia.com/xml-data/corpfiling/AttachHis/8b255235-0f03-4ea9-bda3-f10cdd5567ef.pdf where a roundabout answer to your question.

I also would like to add that EV arent in experimenting stage. They are in production with incremental updates happening very rapidlz

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When an auto ancillary company gets an order for a particular car model e.g. Suzuki Baleno then that model will be there for next 7-8 years and Suzuki will not change the vendor for a particular component if that component is critical and there are no issues with supplier. Here Sona BLW calls that engagement as program and they have such 56 programs with various OEMs to supply the different parts like differential assembly. Most of these programs have been allotted recently and they are still not reflecting in the revenue. The overall orderbook from these programs is for next 10 years.

Hope this answers your query.

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Indeed. Couple that with :
We have developed an in-house proprietary gear design software that helps us create gear tooth profiles optimised for specific customer needs..,
So imagine a differential gear or differential gear assembly. Everything about the component i.e. dimensions of the component(s), the torque , the lifetime etc have to be engineered to the specific OEM product needs whether it is JLR, Renault or Daimler , Volvo, John Deere ( who BTW are all its customers) .
Now think about it from OEM point of view. He takes 2-3 years with his own engg team to work with Sona. Once design is finalized, it goes into production. That is a lot of OEM resources and time invested . They are locked in* with Sona until the product goes out of production. That period averages to 10 years although the CEO said it is typically longer. The 14000 Cr guidance given from CEO is based on average 10 years.
So even though it is a rapidly evolving industry, OEM products still needs to be sold with currently available technology . That still takes time as outlined above .

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Indeed. Couple that with :

We have developed an in-house proprietary gear design software that helps us create gear tooth profiles optimised for specific customer needs. .,

So imagine a differential gear or differential gear assembly. Everything about the component i.e. dimensions of the component(s), the torque , the lifetime etc have to be engineered to the specific OEM product needs whether it is JLR, Renault or Daimler , Volvo, John Deere ( who BTW are all its customers) .
Now think about it from OEM point of view. He takes 2-3 years with his own engg team to work with Sona. Once design is finalized, it goes into production. That is a lot of OEM resources and time invested . They are locked in* with Sona until the product goes out of production. That period averages to 10 years although the CEO said it is typically longer. The 14000 Cr guidance given from CEO is based on average 10 years.
So even though it is a rapidly evolving industry, OEM products still needs to be sold with currently available technology . That still takes time as outlined above .

*I doubt if Auto OEMs will single source critical products.

Fit for 55: A review and evaluation of the European Commission proposal for amending the CO2 targets for new cars and vans

Quite aggressive moves from OEMs to switch to EV.

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A good presentation on EV and Power sector

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magnetless motor R & D update.pdf (550.1 KB)

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Update from yesterday:

This new technology seems to be pathbreaking and may have long term implications on the way drive motors are manufactured.

AJ
Disclosure: Invested.

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I am not sure what has changed since the last engagement regarding this Magnetless motors. On one side management hints that this technology does not exist and it will be either 1 or 0. On other hand they try to bank on this technology and try to garner more investor attention.

Disc: Invested

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There is nothing new in the recent corporate statement filing. It was mentioned already in the Q1 FY22 Concall. It seems to be a formal announcement only.
As far as magnetless motor is concerned, I doubt much would have changes since August-21 when Anil Deshmukh gave a status update. I would be surprised if there is a production version of the motor any time before 2024.

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A good interview giving insights on Margins, EV share in the product segment and future growth. Could not get Youtube link for this video.

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Can India attain 30% private EV sales by 2030? (moneycontrol.com)

Investor Presentation PowerPoint Presentation (bseindia.com)
Qtr Results f6053b15-b3d2-4790-b8b9-dc0ab6d5c5a3.pdf (bseindia.com)

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Video recording of Q2-Fy22 earnings call.

Hi Suklani
I may be wrong but this is how I would look at this company
The company does not be a world Leader or anything close to that to have great revenue and make a decent profit …
It can give great returns if it can manage to supply parts and components to Manufacturers in India. The moat is here not the technology but treliable and trustworthy partner for EV Manufacturers.
I’ll focus on efficiency and output of the production units as compared to anything. My suggestion is to get in touch in with employees working in the factory.

Hello All,
I am quite surprised to see such high Margins by this co. even though its one of the most competitive industries & EVOLVING at a break-neck speed —I was today listening to the Conf. call of another Major Auto component mfrer ( recently listed ) & they were asked if EV focus & new order book ( healthy wins ) in that space will increase their margins & the comment by the mgmt was telling —'We are in a highly competitive and evolving sector with newer and newer tech development & precision requirements & competition & I dont think we have the liberty to increase our margins materially in EV vs ICE ’

So I am a bit perplexed by How Sona is able to command such industry beating margins despite so many other older & established cos in the same segment not reaching even 80% of margins they have , what is the competitive edge this co have developed. Frankly whenever i hear Sanjay or other mgmt in news and interviews --I dont get the confidence that they are doing something which nobody else is doing …so struggling here to see if anybody has any plausible explanation for it ? Disc : Just tracking not invested . Have a skeptical view on this unless proven otherwise !

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The answer to this has been answered in the above video from Bloomberg Quint Talking Point. Mr. Vivek Vikram Singh talks about the same mentioning (starting from 17:00)
a. Make best product for that category
b. Make that product as cheap as possible for the customer
c. Deliver that product as fast as possible

The products they are making are with precision and again every product which comes out of the factory is traceable in case of defects as you can see in the below video(They are using QR Code based tracking for each product getting shipped). The higher margin comes with point a and b wherein they can be the lowest cost producer for a product in the world and that with a precision(Where their R&D comes into play)

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Sona BLW likely to get added to the FTSE India index during its quarterly rebalancing exercise.

As per IIFL Alternative Research estimates will see inflows of $23 million

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