Sona Comstar Targets Growth with Strategic Acquisitions and EV-Focused Order Book
Sona Comstar sets sights on acquisitions, EV-focused order book to drive growth
The Economic TimesImage: The Economic Times
Sona Comstar, based in Mumbai, is exploring acquisitions while managing a ₹23,700 crore (approximately $2.85 billion USD) order book, predominantly from electric vehicle (EV) projects. With ₹1,100-1,200 crore in cash, the company may consider debt for larger deals, focusing on technology and product adjacencies in automotive and railway sectors.
- 01Sona Comstar has a ₹23,700 crore order book, with 70% from electric vehicles.
- 02The company holds ₹1,100-1,200 crore in cash and has an unleveraged balance sheet.
- 03Acquisitions may target technology or new product areas, including robotics and drones.
- 04Only 10% of the order book is tied to specific EV platforms, reducing concentration risk.
- 05The railway segment contributes ₹1,300 crore to the order book, with quicker execution timelines.
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Sona Comstar, an auto-components manufacturer located in Mumbai, is actively seeking acquisitions to support its growth strategy, backed by a substantial order book worth ₹23,700 crore (approximately $2.85 billion USD). Chief Financial Officer Rohit Nanda highlighted that 70% of this order book is derived from electric vehicle (EV) platforms, although this is a decrease from 80% a year ago. The company is currently sitting on ₹1,100-1,200 crore in cash and maintains a completely unleveraged balance sheet, allowing flexibility in pursuing acquisitions. While no specific targets are in advanced stages, Nanda indicated that the size of potential deals could exceed ₹2,000 crore if warranted. The focus for acquisitions will be on technology and new product areas, particularly in automotive, railway, robotics, and drones. Notably, only 10% of the order book is linked to specific EV platforms, mitigating concentration risk. The railway business, which constitutes ₹1,300 crore of the total, operates on a tender-based system with quicker execution timelines.
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Sona Comstar's growth strategy through acquisitions could lead to increased job opportunities and innovation in the automotive and railway sectors, benefiting local economies.
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