ICICI Direct has given Buy recommendation for Bharat Forge recommended buy rating on the stock with a target price of Rs 875 in its research with a target price of Rs. 875 in its research report issued on Jun 07, 2021

ICICI Direct’s research report on Bharat Forge

Bharat Forge (BFL) reported a robust performance in Q4FY21. Standalone revenues came in at Rs 1,307 crore (up 26.2% QoQ), amid 9.6% QoQ tonnage growth to 55,837 MT. Total India revenues were at Rs 565 crore (up 9.6% QoQ). Export revenues, on the other hand, were a real surprise and were up 42.9% QoQ to Rs 731 crore. Standalone EBITDA for the quarter was at Rs 359 crore, with consequent margins at 27.5%. EBITDA margins for the quarter were positively impacted by forex gains. Adjusting for this, margins were at 25.5%, up 300 bps QoQ. Standalone PAT was at Rs 205.5 crore.

Outlook

We upgrade the stock from HOLD to BUY, valuing it at Rs 875 i.e. 35x P/E on FY23E EPS of Rs 25 (earlier target price Rs 670).