Shares of this auto ancillary company rally after the announcement of EPS accreditive acquisition!

Shares of this auto ancillary company rally after the announcement of EPS accreditive acquisition!

Indian Market
by 5paisa Research Team Last Updated: 2023-01-10T15:22:12+05:30

Yesterday, the company reported that it has signed an agreement to acquire a 54% equity stake in a Serbia-based company.

The shares of Sona BLW Precision Forgings Ltd (Sona Comstar) are buzzing on the bourses today. As of 11.58 am, the shares of the company are trading higher by 7.50%. Today, the company reported a spurt in trading volume by more than 4.42 times. Owing to this, the stock is one of the top gainers on BSE from Group A. Meanwhile, the frontline index S&P BSE Sensex is down by 0.94%.

The rally in the share price of Sona BLW Precision Forgings Ltd has come on the back of a significant announcement made by the company.

Yesterday, the company reported that it has signed an agreement to acquire a 54% equity stake in NOVELIC, a Serbia-based company that is a leading provider of mmWave radar sensors, perception solutions and full-stack embedded systems.

ADAS sensors are a fast-growing category in the automotive industry, with a potential market size of USD 43 billion in 2030. Notably, NOVELIC is one of the very few profitable, high-tech, and fast-growing companies in the ADAS Sensor space. It is vertically integrated across the value chain from machine learning and perception software to hardware and chip design; its partners include global automotive OEMs, autonomous vehicle makers, Tier-1s and chip manufacturers like Infineon and Texas Instruments.

The acquisition is expected to be EPS accretive for Sona Comstar from the first year and offers strong growth opportunities over the medium term.

The company is currently trading at a TTM PE of 68x, as against the industry PE of 35x. In FY22, the company delivered an ROE & ROCE of 21.4% and 23.6%, respectively. The company is a constituent of Group A stocks and commands a market capitalization of Rs 26,410.68 crore.

Today, the scrip opened at Rs 446 and has touched a high and low of Rs 457.30 and Rs 431.55, respectively. So far 2,98,037 shares have been traded on the bourses. The stock has a 52-week high & low of Rs 795 and Rs 397.35 respectively on BSE.


Start Investing in 5 mins*

Get Benefits worth 2100* | Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

Open Free Demat Account

& get benefits worth 2100*

Resend OTP
Please Enter OTP
  • Have Promo code?
  • Use code ACT2100
Enter Promo code
Account belongs to

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number