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Buy Bharat Forge; target of Rs 870: Motilal Oswal

Motilal Oswal is bullish on Bharat Forge recommended buy rating on the stock with a target price of Rs 870 in its research report dated August 11, 2022.

August 14, 2022 / 12:13 PM IST
 
 
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Motilal Oswal's research report on Bharat Forge


BHFC’s 1QFY23 earnings were a beat on all fronts, led by strong traction in the Auto business and benign RM costs aiding margin. While its core business is seeing a sharp cyclical recovery, the management’s initiatives to diversify into aluminum, light-weighting, and EV components have started to fructify. FY23 will see the first full-year contribution from its recently acquired businesses. We have upgraded our numbers for the standalone entity, which will offset the negative impact of the US aluminum forging business that is ramping up. We have maintained our FY23/FY24 EPS estimate. We are yet to build in any contribution from Sanghvi Forgings, and JS Auto. We maintain our Buy rating with a TP of INR870 (24x Sep’24E EPS).


Outlook


We estimate a consolidated revenue/EBITDA/PAT CAGR of 10%/14.5%/22% over FY22-25. The stock trades at 27.8x/22.1x FY23E/FY24E consolidated EPS. We maintain our Buy rating with a TP of INR870 (at 24x Sep’24E EPS) .


For all recommendations report, click here

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Bharat Forge - 120822 - moti

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first published: Aug 14, 2022 12:13 pm
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