Buy Bharat Forge; target of Rs 1615: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Bharat Forge has recommended buy rating on the stock with a target price of Rs 1615 in its research report dated May 09, 2024.

Broker Research

May 09, 2024 / 15:24 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Bharat Forge

We increased our FY26E consolidated estimate for revenue/EPS by ~9/10% respectively owing to strong order book, profitability in its international subsidiary in FY25 and strong management commentary. Its Q4FY24 standalone revenue grew by 16.6% YoY which was 3.4% below our estimate while it was 2.2% higher than consensus estimate. Gross margin was ~80bps better than our estimates at 58.6% driven by execution of the export order book. It reported strong YoY growth across segments with bulk of the growth coming in from International business as domestic business remained flat barring Industrial segment which grew ~2x over last year. Going ahead, the management expects ramp-up in Aerospace, Defense, Industrial and EV business shall drive the growth with meaningful contribution to its business in the next few years. We remain positive on BHFC given (1) multiple growth drivers in the domestic & export automotive segment, (2) strong export order book mainly in the international market and (3) rising traction in the E-mobility division.

Outlook

Factoring this, we estimate its revenue/EBITDA/PAT to growth at a CAGR of 15%/29%/63% over FY24-26E. We upgrade our rating from ‘ACCUMULATE’ to ‘BUY’ with a TP of Rs 1,615 valuing it at 30x on its FY26E EPS.

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