Buy Bharat Forge, target price Rs 840: ICICI Direct

ICICI Direct has buy call on Bharat Forge with a target price of Rs 840. The current market price of Bharat Forge Ltd. is Rs 657.6. Time period given by analyst is one year when Bharat Forge Ltd. price can reach defined target.

Bharat Forge Ltd., incorporated in the year 1961, is a Large Cap company (having a market cap of Rs 30617.11 Crore) operating in Auto Ancillaries sector.

Bharat Forge Ltd. key Products/Revenue Segments include Steel Forgings, Scrap, Export Incentives, Job Work, Dies & Tools and Wind Mills for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 3656.05 Crore, up 50.54 % from last quarter Total Income of Rs 2428.64 Crore and up 71.23 % from last year same quarter Total Income of Rs 2135.23 Crore. Company reported net profit after tax of Rs 242.56 Crore in latest quarter.

Investment Rationale
BFL is expected to report a steady operating performance in Q1FY23 largely tracking stable demand prospects across domestic and export markets including oil & gas and industrials space. On a standalone basis, we expect the company to report net sales of Rs 1,666 crore, down 1% QoQ. EBITDA for Q1FY23 is seen at Rs 417 crore with corresponding EBITDA margins at 25%, down 80 bps QoQ. Standalone PAT is expected at Rs 243.3 crore, down 7% QoQ

Promoter/FII Holdings
Promoters held 45.25 per cent stake in the company as of 31-Mar-2022, while FIIs owned 19.8 per cent, DIIs 23.54 per cent.