Motilal Oswal is bullish on Bharat Forge recommended buy rating on the stock with a target price of Rs 385 in its research report dated June 29, 2020.
Motilal Oswal 's research report on Bharat Forge
Bharat Forge’s (BHFC) 4QFY20 results were hit across segments, which led to sharp erosion in EBITDA margins. While the worst is expected in 1HFY21, leading indicators point toward possible sharp recovery in FY22E. We believe BHFC will emerge stronger from this down-cycle, strengthen its position in the global supply chain and possibly benefit from the potential diversification from China. - We have cut EPS for FY21/FY22E by 79%/16% to factor in the weakness in all the key industries that BHFC serves. Maintain Buy.
We estimate consol. revenue/EBITDA/PAT at 2%/15%/25% CAGR (FY20-22E). The stock trades at 22x FY22E consol. EPS and 11.7x EV/EBIDTA. Maintain Buy with TP of ~INR385 (~25x Jun’22E consol. EPS).
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