Buy Bharat Forge; target of Rs 998: HDFC Securities

HDFC Securities is bullish on Bharat Forge has recommended buy rating on the stock with a target price of Rs 998 in its research report dated May 05, 2023.

Broker Research

May 08, 2023 / 14:36 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

HDFC Securities' research report on Bharat Forge

Bharat Forge’s (BHFC) Q4 consolidated earnings missed estimates due to a sharp increase in a loss at India subs and a higher interest burden. Going forward, management believes FY24 will be a turnaround year for BHFC, given: (1) the sharp uptick expected in the defence segment from here on, led by its new order wins in exports (worth INR 20bn) and from domestic—it has received an order for 307 ATAGs, for which RFQs would be floated soon. Management expects this business to ramp up to USD 100mn in FY24 (from INR 3.2bn), with strong margins and returns; (2) strong visibility in aerospace where it expects to grow 30-40% even in FY24, after doubling in FY23 and a near term target to reach INR 5-6bn in revenue (from INR 1.7bn now); (3) huge rampup potential at JS-Auto Cast, given its capacity is expected to increase by 2x and there is huge demand for AL castings, both in India and abroad. This is apart from the strong demand momentum it is witnessing in auto segments, from both domestic and export markets.

Outlook

Also, the company expects to improve the performance of overseas subs from here on in each quarter as it ramps up the Al forgings facilities in US and Europe. Reiterate BUY with a revised TP of INR 998 (from earlier INR 928) as we roll forward to FY25 EPS.

For all recommendations report, click here