Shares of Bharat Forge climbed over 7 percent a day after the company posted an over 7 percent rise in consolidated net profit to Rs 160.37 for the April-June quarter, backed by strong growth in automotive exports.
Investors also cheered the strong management commentary. After the results, Baba Kalyani, Chairman and MD of Bharat Forge, told CNBC-TV18: "Our exports will remain strong. We have many new avenues where exports are increasing. And we have a lot of work that we are doing in the aluminium space."
Kalyani added that the company can easily target an improvement of 100 basis points in margin.
At 10:28 am, shares of the auto components maker were trading at Rs 791, an up of 7.43 percent from the previous close on the BSE.
The company’s consolidated revenue from operations during the period under review stood increased by 35 percent and stood at Rs 2,851.46 crore. In the first quarter of last year, it stood at Rs 2,107.68 crore.
Bharat Forge said in a regulatory filing that the automotive export revenue grew in the April-June quarter driven by both commercial and passenger vehicle segments. As per the management, exports added 60 percent of the company's revenue.
Shares of the company have grown steadily in the year so far and have gained 11.46 percent on the BSE.
What do analysts have to say?
Brokerage firm UBS has maintained a buy call on the shares of Bharat Forge and has raised the target price from Rs 870 per share to Rs 900 per share.
The brokerage firm said Bharat Forge’s standalone EBITDA ( earnings before interest, taxes, depreciation, and amortisation, which is a measure of a company's overall financial performance) for the first quarter of FY23 beat consensus by 8 to 9 percent and the company’s outlook remains relatively strong.
UBS expects Bharat Forge to see strong double-digit growth in India industrials for the next 3-4 years. It also projected that the company might see a significant ramp-up in the US and Europe aluminium plants.
Brokerage firm Jefferies has also given an 'underperform' call on the shares of Bharat Forge with a target price of Rs 540 per share.
The brokerage firm added that the near-term outlook for the company looks good but a falling earnings growth trajectory is being seen.
We see EBITDA/EPS Rising 13 percent /16 per cent in the financial year 2023 (FY23) and just 9 percent /11 percent in FY24, Jefferies added. The brokerage firm has also cut FY23-24 EPS estimates for Bharat Forge by 4 to 5 percent
Meanwhile, market expert Mitessh Thakkar of earningwaves.com recommended buying Bharat Forge with a stop loss of Rs 724 and a target of Rs 760.
First Published: Aug 12, 2022 11:33 AM IST
