Shares of leading Indian multinational provider of forging and engineering services, Bharat Forge dropped nearly 1 percent on BSE during the early trade on Wednesday, February 22 as the benchmark Nifty50 traded 157.45 points lower at 17669.25, while the BSE Sensex was 521.81 points down at 60150.91 reported ET.
The company reported a 21.85 percent increase in net sales at ₹1952.10 crore for the December quarter and marked its highest-ever export revenue despite macroeconomic challenges.
Its quarterly net profit stood at Rs. 289.18 crores in December 2022, indicating a decrease of 14.29 percent from Rs. 337.40 crores in December 2021.
During Wednesday’s trade the stock opened at a price of Rs. 854.60 per share, closely against the previous close of Rs. 854.80 per share and rallied further during the early trading session to touch an intraday high of Rs. 862.10.
However, it failed to hold onto this rally and was trading at ₹849 apiece, down by 0.68 percent at 11:15 a.m. on the NSE.
The stock touched a 52-week-high of Rs. 919.45 on December 15, 2022 and a 52-week-low of Rs. 595 on March 08, 2022, indicating that at the current level, the stock is trading over 42 percent above its 52-week low and just 8 percent below its 52 week high.
The stock has declined nearly 3 percent in the last one month. Moreover, it has increased by almost 23 percent in the previous one year. Furthermore, in the past five years, it has returned over 13 percent to its shareholders.
On Monday, Bharat Forge Limited announced its financial results for the month of December 2022. The company’s EBITDA stood at Rs. 572.83 crore in December 2022, representing a 29.11% increase from the Rs. 443.67 crore reported in December 2021.
However, the company’s earnings per share decreased to Rs. 6.21 in December 2022 from Rs. 7.25 in December 2021.
Domestic brokerage HDFC Securities Bharat Forge (BHFC) lowered their FY23 estimates by 16%, while maintaining their FY24- 25 earnings, given the healthy outlook across key segments. It maintained its ‘BUY’ call unchanged target price of Rs. 928.
Q3 consolidated earnings of the company missed estimates, largely led by a higher interest burden even as operational numbers (including standalone performance) were in line. Overall, management believes FY24 is expected to be a turnaround year for BHFC, the brokerage said.
Another brokerage YES Securities is bullish on Bharat Forge and recommended a ‘BUY’ rating on the stock with a target price of ₹1028 in its research report.
With a diverse presence, BHFC is better placed than its previous cycles to benefit from steady orders and ramp up in domestic/export PVs and CVs and healthy outlook for industrials. We raise FY24/25 EPS by 5-5.5% to factor in for new order wins and other income, the brokerage added.
Prabhudas Lilladher maintained its buy rating on Bharat Forge with a target price of ₹1000 post-Q3 results.
“We remain positive on BHFC given multiple growth drivers in the domestic & export automotive segment (upcycle in CV industry & easing chip shortage), (2) double-digit growth in high margin non-auto segment (3) contribution from defense & renewable segment and (4) rising traction in E-mobility division,” the brokerage stated, Economic Times reported.
Bharat Forge Limited is an India-based company, which is engaged in manufacturing and selling of forged and machined components including aluminum castings for auto and industrial sectors. It supplies components to the aviation sector, such as fan blades, compressors and turbines, aero structures, and gear components.
According to a Mintgenie poll, an average of 27 analysts have a ‘BUY’ call on the stock.