Hold Bharat Forge, target price Rs 785: Emkay Global

Emkay Global Financial Services has hold call on Bharat Forge Ltd. with a target price of Rs 785. The current market price of Bharat Forge Ltd. is Rs 721. 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 33422.28 Crore) operating in Auto Ancillaries sector.

Bharat Forge Ltd. key Products/Revenue Segments include Steel Forgings, Scrap, Export Incentives, Job Work, Wind Mills for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2884.04 Crore, down -21.12 % from last quarter Total Income of Rs 3656.05 Crore and up 34.24 % from last year same quarter Total Income of Rs 2148.39 Crore. Company reported net profit after tax of Rs 162.84 Crore in latest quarter.


Investment Rationale
The brokerage retains HOLD on Bharat Forge with Sep-23 TP of Rs785, based on 24x Sep-24E EPS for standalone operations, factoring-in the limited upside potential and weak outlook for global CVs. The valuation multiple is DCF based which also considers 15% premium for upside from nascent segments. Historically, valuation has been under pressure in global CV down-cycles.