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Last Updated : Sep 23, 2020 04:41 PM IST | Source: Moneycontrol.com

Ramkrishna Forgings, Motherson Sumi gain 3-5% on strong Class 8 truck orders in August

"US class 8 truck orders were up sharply which is positive news for forging companies like Bharat Forge and Ramakrishna Forgings which supplies components for US Class 8 trucks," Jyoti Roy of Angel Broking said.

Ramkrishna Forgings, Motherson Sumi Systems and Bharat Forge shares gained 3-5 percent intraday on September 3 after registering a sharp increase in North America Class 8 truck sales during August 2020.

"Preliminary North American Class 8 net orders continued to climb in August, reaching 20,500 units for the month. August order activity was very consistent with July, up 3 percent MoM, and up 90 percent YoY," FTR said in its statement.

Class 8 net orders for the last 12 months now total 1,77,000 units, it added.

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FTR said orders are expected to stay in the 20,000 range for the next few months with buyer confidence increasing as the economy recovers and freight volumes rise. There is less uncertainty regarding the pandemic as businesses and consumers adapt to the current environment, it added.

Bharat Forge earns 12 percent revenue from North American truck market and Motherson Sumi's subsidiary PKC also has presence in North American commercial vehicle market.

"US class 8 truck orders were up sharply which is positive news for forging companies like Bharat Forge and Ramakrishna Forgings which supplies components for US Class 8 trucks. This is the second month in a row that class 8 truck orders have been above 20,000 units and are expected to stay in the range going forward as the US economy is gradually opened up," Jyoti Roy, DVP- Equity Strategist at Angel Broking told Moneycontrol.

While the domestic medium & heavy commercial vehicle (MHCV) industry is expected to remain muted for some time, greater demand from the US should provide support to forging companies," he said.

At 11:20 hours IST, Ramkrishna Forgings was up 2.11 percent at Rs 242 and Motherson Sumi gained half a percent at Rs 116.10, but Bharat Forge corrected after a 3 percent early trade rally, down 0.7 percent at Rs 495.10 on the BSE.

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First Published on Sep 3, 2020 12:05 pm
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