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Last Updated : Aug 14, 2019 04:24 PM IST | Source: Moneycontrol.com

Hold Bharat Forge; target of Rs 430: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Bharat Forge with a target price of Rs 430 in its research report dated August 13, 2019.

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Prabhudas Lilladher's research report on Bharat Forge


BHFC's Q1FY20 operating performance were weak with OPM at 26% (PLe: 30%), on the back of lower realizations (flat YoY/ -17% QoQ impacted by inferior product mix. While the management plans to neutralise the impact of current OEM production decline by way of higher content per vehicle and increasing market share, it seems like a long drawn strategy and we expect domestic auto segment revenue over FY21 to remain subdued. The commissioning of its Baramati, Nelor and other capacity, ramping up of which will have an impact on margins over FY20/21E. However, on the positive side, the management has guided for a growth in exports (oil and gas segment) in coming quarters, which should partially negate impact of CV business slowdown.


 

Outlook

We maintain Hold with a target price of Rs430, based on 18x Mar'21E Consolidated EPS.

For all recommendations report, click here

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First Published on Aug 14, 2019 04:24 pm
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