Credit Rating

Date: - 25th June, 2026 BSE Ltd. National Stock Exchange of India Ltd. Regd. Office: Floor - 25, Listing Deptt., Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (East), Dalal Street, Mumbai-400 001. Mumbai - 400 051 BSE Scrip Code: 543300 NSE Scrip: SONACOMS Subject: - Intimation of credit rating pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Dear Sir / Madam, Pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that India Ratings & Research has affirmed the Company’s bank loan facilities rating as ‘IND AA+/Stable/IND A1+’. Enclosed herewith the press release issued by India Ratings & Research dated 25th June, 2026. This is for your information and further dissemination. Thanking you, For Sona BLW Precision Forgings Limited Pankaj Gupta Senior Vice President (Legal), Company Secretary and Compliance Officer Enclosed as above; India Ratings Affirms Sona BLW Precision Forgings’ Bank Loan Facilities at ‘IND AA+’/Stable Jun 25, 2026 | Sona BLW Precision Forgings Limited | Auto Components & Equipments India Ratings and Research (Ind-Ra) has affirmed Sona BLW Precision Forgings Limited’s (SBPFL) bank loan facilities’ rating as follows: Details of Instruments Instrument Date of Coupon Maturity Rating Assigned with Rating Size of Issue (million) Type Issuance Rate Date Outlook/Watch Action Bank loan INR7,250 (reduced from - - - IND AA+/Stable/IND A1+ Affirmed facilities INR9,250) Analytical Approach Ind-Ra continues to take a fully consolidated view of SBPFL and its wholly-owned subsidiaries, to arrive at the ratings, because of the strong operational and strategic linkages among them. Detailed Rationale of the Rating Action The rating reflects SBPFL’s sizeable order book (including electric vehicle (EV) related order book), benefitting from consistent new product launches along with the recent acquisition of the railway division from Escorts Kubota Ltd completed in FY26, which has led to further diversification of the overall revenue profile. The rating also reflects the company’s strong operating performance, robust liquidity, and continued strong credit metrics at the consolidated level despite the acquisition in FY26, and the likelihood of the same being sustained over the near-to-medium term. List of Key Rating Drivers Strengths- Healthy order book and addition of railway division to support revenue growth Strong EBITDA generation Improving business profile Improved market position Robust credit profile; moderate capex plans Weaknesses- High customer concentration Exposure to forex volatility Detailed Description of Key Rating Drivers Healthy Order Book and Addition of Railway Division to Support Revenue Growth: SBPFL’s consolidated revenue increased 26% yoy to INR44,495 million in FY26 (FY25: INR35,460 million, FY24: INR31,848 million), driven by integration of railway division, ramp-up of EV programs in Europe and India, customer additions and the execution of new order book, as well as high content per vehicle towards EV portfolio, which comprises around 70% of the orderbook. Ind-Ra expects the consolidated revenue to grow by 20%-25% yoy in FY27 and 15%-20% yoy in FY28 on the back of new programmes across product segments, such as EV traction motors, suspension motors, gears and differential assemblies along with the addition of the railway division. The growth will also be supported by customer additions as well as SBPFL’s strong order book-backed capacity expansion for assembly lines. As on 31 March 2026, SBPFL had an unexecuted order book of INR237,000 million, 70% of which pertains to the EV segment, to be executed in the next 10 years. Strong EBITDA Generation: SBPFL’s EBITDA has been growing consistently since FY20. In FY26, the consolidated EBITDA increased to INR10,812 million (FY25: INR9,668 million, FY24: INR9,021 million), mainly driven by healthy revenue growth, a better product mix and improving operating leverage. Ind-Ra expects the consolidated EBITDA to remain healthy over FY27-FY28 on the back of healthy volume traction in EV-related products, increase in railway business, and the ramping up of new assembly lines, resulting in improved cost efficiencies. The consolidated EBITDA margins remained resilient over FY19-FY26, ranging between 24% and 30%, backed by SBPFL’s strong market leadership position, cost controls and products specialisation. In FY26, the consolidated EBITDA margin moderated to 24.3% (FY25: 27.3%, FY24: 28.3%) owing to the addition of the railway division, which offers slightly lower margins. Ind-Ra expects the EBITDA margins to continue to range between 23%-24% over FY27-FY28. SBPFL generated a strong return on capital employed (ROCE) over FY18-FY24 at the consolidated level. However, the ROCE weakened slightly to 14%-17% during FY25 and FY26 as a result of qualified institutional placement (QIP). The ROCE is likely to gradually improve from FY27. Improving Business Profile: SBPFL has a well-diversified revenue base, with differential gears accounting for 22% of the FY26 consolidated revenue, followed by differential assemblies (17%), micro-hybrid starter motors (16%), railways brake system, suspension and couplers (11%), traction and suspension motors (11%) and conventional starter motors (7%). Moreover, on the power train front, SBPFL derives 35% of its consolidated revenue from battery electric vehicles (BEV), 35% from power-source neutral vehicles, 20% from hybrid/micro-hybrid vehicles and 10% from internal combustion engine vehicles. SBPFL has diversified its product portfolio over a period of time into more technological advanced products and segments, which has helped it achieve a strong market position. The company has significantly expanded its presence in the BEV segment, while reducing its dependence on internal combustion engine vehicles. The revenue share of the BEV segment increased to 35% in FY26 from 1% in FY19The group faces limited threat from the shift in industry trends towards EVs, as it derives about 40% of its revenue from gears and sub-assemblies that can be used in both internal combustion engines and EVs. Geographically, the company derived 51% of its FY26 revenue from India (due to integration of railway business) and the remaining from overseas operations, which are spread across North America (27%), Europe (17%), and Asia and others (5%). This limits the company’s exposure to a downturn in any particular geography. Improved Market Position: SBPFL is one of India’s leading manufacturers of precision forged differential bevel gears and differential assemblies across various vehicle segments. As per the management, at end-2025, the company’s market share in global differential gears and starter motors stood at 8.7% (2024: 8.8%, 2023: 8.1%) and 4.2% (4.4%, 4.2%), respectively. In the domestic market, the company holds a market share of 80%-90% in commercial vehicles and tractors and 55%-60% in passenger vehicles. It also has strong relationships with major original equipment manufacturers in the domestic as well as international markets. Robust Credit Profile; Moderate Capex Plans: SBPFL’s credit profile remained robust over FY19-FY26 on the back of its low debt levels, coupled with its strong operating profitability. The company maintained a net cash position over FY25- FY26 (net adjusted leverage (net debt including lease liabilities/EBITDA) in FY24 was 0.1x). The interest coverage (EBITDA/interest expense) strengthened to 46.0x in FY26 (FY25: 32.0x, FY24: 35.0x) on the back of lower debt levels. Ind-Ra expects the consolidated credit metrics to remain strong over the near-to-medium term owing to strong EBITDA generation, continued low debt levels, and modest capex plans. The company plans to incur capex of INR3,000 million-4,000 million each during FY27 and FY28, mainly towards railway division, capacity [Showing first 8,000 characters — download PDF for full document]