Lower BEV revenues weigh on Sona Comstar’s Q1 results as revenue slides 5% to ₹851 crore

Auto components major Sona Comstar said on Monday that its first-quarter revenue slid by 5% to about ₹851 crore, as a 25% plunge in quarterly BEV revenue growth weighed on the Gurugram-based company’s overall topline. This corresponded to a quarterly net profit of ₹124.7 crore, a 12% fall from the ₹142 crore net profit recorded in the first quarter of last fiscal, amid increased expenses.

Revenues from the battery electric vehicle segment, which includes integrated motor controllers for electric two-wheelers, electric control panel, short-range and integrated radar sensors, among others—and which makes close to 25% of the total revenue—fell 25% year-on-year to ₹210.6 crore, according to an investor presentation. Sona Comstar is India’s largest importer of rare earth elements, importing 120 metric tonnes of magnet from China in the last financial year. The company is also mulling setting up local manufacturing of rare earth magnets in India to lessen its reliance on China.

Therefore, it puts the company at greater risk of being subject to China's chokehold over the supply of rare earth magnets. It does not come as a surprise that it cites an adverse operating leverage—when the company’s fixed costs are high and its sales do not grow at a sufficient rate, causing profits to decrease at a faster rate than revenues—as the reason why its Ebitda margin has declined by about 4.3% year-over-year. The cost of materials consumed also increased by 8.9% from the first quarter of last year to ₹416.4 crore.

Sona Comstar MD and Group CEO Vivek Vikram Singh said in a statement that the first quarter was a challenging quarter for the components-maker, due to the convergence of multiple factors. However, the caveat, according to Singh, is that the factors mentioned above, which he did not elaborate on, were temporary, and some, according to Singh, have started to resolve already. “We have received a large order from a North American OEM to supply differential assemblies. This is our largest order win in the last two and a half years. We believe this is likely to be one of the most significant and successful EV launches in many years,” he added.

The company has received an order from an existing customer, a North American OEM of ICE and electric passenger vehicles, to supply differential assemblies with final drive gear for their new electric passenger vehicle platform. This program has added ₹1550 crore to its order book, and production is likely to commence in the third quarter of FY28. Sona Comstar has also received an order from an existing customer, an Indian OEM of ICE and electric two-wheelers and three-wheelers, to supply drive motors for their new electric three-wheeler. This program has added ₹2600 crore to its order book, and production is likely to commence in the fourth quarter of FY26.

Sona Comstar signed a binding term sheet with Jinnaite Machinery on 20th July to establish a joint venture (JV) company in China. The JV will manufacture and supply driveline systems and components to automotive OEMs in China and globally. Sona Comstar will invest $12 million, while JNT will contribute $8 million in assets and business to the joint venture in the first phase. The JV is expected to commence operations in the second half of the current financial year. The JV marks Sona Comstar’s foray into the Chinese EV market.

On June 12, Sona Comstar’s chairman, Sunjay Kapur, unexpectedly passed away during a polo match in Windsor, England. Subsequently, the company now recognises Kapur as the chairman emeritus, and appointed Jeffrey Mark Overly as the chairman of the company and Priya Sachdev Kapur, Sunjay Kapur’s widow, as a non-executive director of the company.