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).
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
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.