Hold FAG Bearings India; target of Rs 4770: Karvy

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26 Aug, 2025 12:21

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     Karvy Stock Broking's report on FAG Bearings India

"With an up-tick in economy, aided by Indian government’s industry friendly policies coupled with RBI’s initiative to cut interest rates, leading to reduction in bank lending rates, manufacturing sector is feeling re-energized. As bearing being the basic requirement in manufacturing sector, FAG is well placed to capitalize on this much anticipated surge in economy. Indian government is focused on clean energy and has set a target of 175,000 Mw of renewable energy by FY22. With Indian government’s intense focus on implementation, we believe India’s wind energy installed capacity is expected to grow at a CAGR of 15.4% between FY15-FY22 from 22,000 Mw to 60,000 Mw. FAG providing customized solutions in wind energy sector is expected to benefit from the same."

Valuation and Outlook"At CMP of Rs. 4471, FAG Bearings is trading at 31.7x FY17E EPS, which is at 2 standard deviations from mean PE. On the back of strong economic environment together with reviving automotive industry, FAG is all set to grow. While there are several positive factors working in favor of FAG, most of them are already factored in the share price. We initiate coverage on FAG with a “HOLD” rating for a price target of Rs. 4770 at 33.8x FY17E EPS representing an upside potential of 6.7% in a 9-12 month time period", says Karvy Stock Broking research report.

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