Sharekhan has given Buy recommendation for Ramkrishna Forgings with a target price of Rs. 940 in its research report issued on Jul 26, 2021

Sharekhan’s research report on Ramkrishna Forgings

Q1FY2021 results were ahead of our expectations, aided by EBITDA margin expansion on a richer product mix and price hikes. Earnings to report a strong 146% CAGR over FY2021-FY2023E, driven by a 26.5% CAGR in domestic revenue, 38.6% CAGR in export revenue, and a 170 bps rise in EBITDA margin over FY2021-FY2023E. The stock trades at P/E multiple of 15.4x and EV/EBITDA multiple of 7.2x its FY2023E estimates.

Outlook

We maintain our Buy rating on Ramkrishna Forgings Limited (RKFL) with a revised PT of Rs. 940, led by a strong commercial vehicle (CV) business outlook in India, Europe, and North America and an earnings upgrade.

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