Buy Bharat Forge, Target Price Rs 861: Geojit

Geojit Financial Services Ltd. Buy Buy with a target price of Rs.861. Bharat Forge Ltd. , The current market price of Rs.706.15 is Rs. The time period of which Bharat Forge Ltd. can reach its target is one year.

Bharat Forge Limited, incorporated in the year 1961, is a Large Cap company (having a market cap of Rs 32637.76 Crore) operating in Auto Ancillaries sector.

The major products/revenue segments of Bharat Forge Limited include Steel Forgings, Scrap, Export Promotion, Job Work, Dies & Tools and Wind Mills for the year ended 31-March-2021.

financial situation

For the quarter ended 30-09-2021, the company reported consolidated total income of Rs 2423.90 crore, up 12.82% from last quarter’s total income of Rs 2148.39 crore and up 71.96% from the same quarter last year of Rs 1409.57 crore. Total Earnings. Company has reported Net Profit After Tax of Rs 281.19 Crore in latest quarter.

investment logic
BFL’s strategy of transitioning to new technology products in the US and India for new product development and ramp-up in aluminum forgings is on track and will drive value migration per vehicle in the long run. The brokerage believes that the domestic demand visibility looks attractive and margin expansion is expected on the back of growth coming from the defense sector and continued improvement in the auto space. However, Europe’s rise in COVID cases and subsequent lockdowns are causing concern for the near term. It values ​​BFL at 16x EV/EBITDA on FY23E with target price of Rs 861 and Recommends Buy rating on CMP.

Promoter/FII Holdings
As of 30-September-2021, promoters held 44.76 per cent stake in the company, while FIIs held 25.1 per cent, DIIs held 13.28 per cent.

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