Bharat Forge share price surges over 5% today, Jefferies pegs target at Rs 925; DETAILS here

Bharat Forge Share price today touched NEW highs of Rs 790 today. Bharat Forge market cap is Rs 35700 crore now. 52 weeks low on Bharat Forge is Rs 307. Bharat Forge share price have multiplied over 2.5 times in last 1 year.
 
Jefferies says that Bharat Forge remains positive on opportunities for expansion in vehicle light-weighting, EV components, and defense. It expects the new light-weighting facilities in India, Germany, and US to ramp-up over the next three years. Bharat Forge is planning to spend Rs 2.5-3 bn/year in FY22-23, which will include acquiring a large land parcel in India where some of the existing production facilities could be relocated and expanded. Jefferies raised FY22-23E EPS by 27-32% and price target to Rs 925. Jefferies maintain BUY Rating on Bharat Forge.
 

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Bharat Forge Industrial exports (20% of standalone revenues cross-cycles) are also seeing signs of life, with a pickup in construction and some revival in US shale activity. Caterpillar, a key industrial export customer, is witnessing rising machine sales, and Bharat Forge should also benefit from potential US infra stimulus, says Jefferies.
 
Bharat Forge share price today is Rs 736, up Rs 40 or 5.7%. Bharat Forge made a life high of Rs 749 today. The market cap of Bharat Forge is Rs 34250 cr. In Q4 FY21, Bharat Forge Total Revenues grew by 26.2% on back of a strong 42.9% growth in export revenues and 9.6% growth in domestic revenues. For the full year FY 2021, Bharat Forge recorded total revenues of Rs 36516 mn, a decline of 20% as compared to FY 2020. The EBITDA in Q4 FY21 has grown by 43.5% to Rs 3332 mn. EBITDA margins at 25.5% have expanded by 310 bps as compared to Q3 FY21. PBT before Exchange gain/ (loss) for Q4 FY21 at Rs 2509 million has registered a growth of 73.9% as compared to Q3 FY21. Class 8 Heavy trucks in North America and 16T & above Heavy Duty Trucks in Europe have seen sharp increases in demand. Demand outlook provided by the OEM's is quite robust going ahead.
 
Bharat Forge Management explains that Enhancement of safety norms, increase of axle load norms, GST, emission norms change from BS Ill to BS VI within a short span of time resulting in increased Total Cost of Ownership were some of the headwinds the industry has had to encounter. Although the near-term outlook is negative due to the lockdown to curb the 2 nd Covid 19, the medium to long term outlook is very encouraging especially for the M HCV sector. The focus on infrastructure spending, government's focus on increasing manufacturing as % of GDP from 16% to 25%, PLI schemes, AtmaNirbharta policy and the scrappage policy coupled with investment in road infrastructure points to a long runway for the MHCV sector.
 
Bharat Forge said that they will remain focused on developing and winning new products & pipeline including new customers in the Industrial segment- both in India and globally.