Moneycontrol
Nov 09, 2017 04:35 PM IST | Source: Moneycontrol.com

Brokerages remain positive on Bharat Forge Q2, but stocks lower around 2%

Revenue from operations jumped 41.2 percent to Rs 1,258.02 crore, compared with Rs 890.89 crore in corresponding quarter.

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Bharat Forge ended around 2 percent lower possibly on the back of profit booking by investors after they reacted to the company’s Q2 show.

Auto components supplier Bharat Forge reported a healthy 60.5 percent growth year-on-year in profit for the quarter ended September 2017, driven by revenue as well as operational performance.

Profit for the quarter increased to Rs 203.72 crore from Rs 126.89 crore in year-ago.

Revenue from operations jumped 41.2 percent to Rs 1,258.02 crore, compared with Rs 890.89 crore in corresponding quarter.

Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) surged 49.4 percent year-on-year to Rs 370 crore and margin expanded by 160 basis points to 29.4 percent for quarter ended September 2017.

Brokerages remain positive on the stock and some also raised the target price too.

Brokerage: Deutsche Bank | Rating: Buy | Target: Hiked to Rs 775

The global financial major said that the company had a strong revenue traction in the September quarter and expects Revenue/EPS to grow at CAGR of 15 percent/35 percent over FY17-20. Further, it expects new facility to enhance company's revenue profile over the next 3-5 years and sees recovery in the business drivers in most of the end-markets.

Brokerage: Antique | Rating: Buy | Target: Rs 904

Antique said that the company’s Q2 were above estimates and were led by strong volume growth and improving product mix. Meanwhile, strong volume growth was seen across geographies and segments and the outlook for Class 8 trucks and industrials remained positive.

Brokerage: UBS | Rating: Neutral | Target: Rs 620

UBS said that the company’s second quarter saw solid QoQ growth across segments and expects further QoQ improvement. Potential defence order wins under 'Make in India' program to drive re-rating, it added.

Brokerage: CLSA | Rating: Buy | Target: Raised to Rs 905

CLSA said that the company’s growth momentum was picking up and that the firm delivered strong operating performance for the second consecutive quarter. The exports business too was seeing a sharp turnaround. Domestic business outlook is also healthy given continuing growth in auto & industrial and it raised FY18-20 EPS estimates By 2-5%, the report added. The valuations should sustain given the strong growth outlook.

Bharat Forge was quoting at Rs 718.90, down Rs 9.35, or 1.28 percent, on the BSE. It touched a 52-week high of Rs 749.00.
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