Prabhudas Lilladher has given Buy recommendation for Bharat Forge with a target price of Rs. 997 in its research report issued on Nov 15, 2021
Prabhudas Lilladher’s research report on Bharat Forge
We remain positive on the stock led by 1) multiple growth levers in domestic automotive segment with cyclical turnaround in CV industry, 2) management’s guidance to double domestic Industrial revenue over next 3 years, 3) good traction in E-mobility segment with good product pipeline set to contribute ~EUR 100mn+ (currently EUR 12-15mn) by FY23-24 and 4) potential revenue contribution from defense segment in next 2 years, owing to strong order book. Turnaround of Sanghvi Forging will also further add to the bottom line.
We upgrade BHFC to ‘BUY’ at target price of Rs 997 with 32x Sep-23E EPS and increase our FY23/24 estimates by ~5/6% to factor in strong revenue visibility, going ahead. BHFC’s 2QFY22 came largely in-line with our estimates with PAT growth of 37% QoQ. This was led by improved realizations (+10% QoQ) and operating leverage benefits. Domestic/exports revenues grew 43/4% QoQ.