ICICI Securities issued a buy rating for Bharat Forge with a target price of Rs 2,150. The firm said growth looks strong due to rising demand for trucks and new defence orders. While higher costs hit recent margins, analysts expect upcoming capacity expansions to support the company in the long term.
ICICI Securities's research report on Bharat Forge
Bharat Forge (BHFC)’s consol. EBITDAM was a tad below our estimate due to higher inflationary costs. Management commentary on its growth outlook remains strong. Recovery in Class-8 truck demand and healthy momentum in the domestic CV segment are expected to support growth. We believe medium–long-term prospects remain compelling, aided by a growing order book (OB) in newer verticals like defence, semicon and aerospace. Upcoming capacity expansions, backed by order wins, are expected drive medium-term growth. Key monitorables include improvement in profitability of overseas subsidiaries and timely execution of defence orders.
Outlook
We fine-tune our FY27/28E EBITDA by 1-2%. A sharper cut in EPS is due to higher-than-expected tax-rate. Retain BUY; TP revised to INR 2,150 (vs. INR 2,250), basis 40x Sep’28E EPS