Sona Comstar BLW - Direct EV Play

Sona Comstar partners with Enedym inc to produce magnet less EV motors.

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Sona Comstar Q4 Results

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EU bans sales of ICE vehicles from 2035.
Although valuations are a bit over the top, this is positive for the likes of Sona Comstar

Disc: tracking, no reco.

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Is Sona Comstar involved in this?

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I assume yes . This offering was highlighted in one of their concalls .

Sona is going to rock the EV market. 21 are yet to go to production.

Hi, Can you please let me know which Confcall they talked about product scanning potholes.
Thanks, Mithun

time stmp 5:46

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For Sona this 3 anti thesis point

  1. What will happen if OEMs will start insourcing electric motors(50% of the total cost) and electric drive units instead of getting them manufactured externally.

  2. The revenue profile of Sona faces customer concentration with its top 10 customers contributing 80% of revenue while the top 3 customers contributing 50% of revenue.

  3. Currently, 27% of the Chinese EV market is operating on motors with <50kW power. Logically, this number will increase significantly if motor power will be increased to 100 kW. How will Sona expand its business in China as local players have domination 70%+

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I will answer second question

  1. The revenue profile of Sona faces customer concentration with its top 10 customers contributing 80% of revenue while the top 3 customers contributing 50% of revenue.- A- As Sona BLW management has mentioned in one of the conference call that when the Auto OEM signs a contract with Sona BLW for a particular product that product will be sold to them for next few years till that car model stays in production and Auto OEMs will not move to different vendor unless there are serious issues. So the client concentration may remain for few more years till the new products developed by company will add to significant portion of revenue

Will not be able to comment on 1st and 3rd question.

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For the first question:
Insourcing is a definitely a possibility .
It takes about 2-3 years for a new component to be developed, refined, adapted, tested and released together with the OEM. With such long lead times, once you get in, a product is basically locked in.
I would also assume that for the OEM, if they decides to insource, they can do it on a slightly shorter notice and when it happens it could potentially affect a line of products . It might have a large impact on Sona .

See this is what Vivek Vikram Singh also said - Sona is creeping up the value chain leaving OEMs with integration , labelling and selling. I think he is unsure how things will pan out in the future.
We could see Auto go the notebooks way…or given how govt subsidies drive Auto companies worldwide : a push in insource.

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I see Q1 results are out. Do you see improvements and opportunity to add here based on financials?

Technical/ chart looks good.

From Earnings Call Transcript: Update from MD.
With this addition of 6 new EV programs in Q1 2023 (3 Big orders), we have reached 36 EV programs spread across 23 unique customers.
26 of the 36 are yet to enter serial production demonstrates how much future EV revenue growth remains to be realized.

In addition to the six EV programs have also added seven programs for non-EV applications, but they were smaller in size. With this, now, the EV portion has reached two-thirds of the orderbook

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Asked Investor Relations one question as mentioned below. Seems they don’t want to speak anything more on that topic.

Thought this is helpful for others so posting it here.

Qsn:- “There is mention regarding ERI plan of the largest shareholder Singapore VII Topco III Pte Ltd. And its lock-in date has surpassed. Is it the indication of the holding company’s divestment plan in near future?”

Ans:- “The ERI Plan has been adopted by the Singapore VII Topco III Pte Ltd, the major shareholder of the Company. The Company has made appropriate disclosure on the same in its Annual Report, to the extent information available with it. Beyond this, there is no other information available with the Company.”

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Thanks for sharing this.

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