Bharat Forge shares dipped as much over 6 per cent on Wednesday after the company presented a flat revenue outlook for 2016 at its investor meet.
At 1.03 pm, shares of the company were trading 3.91 per cent down at Rs 795.05. The shares opened at Rs 804.90 and had touched a high and low of Rs 808.15 and Rs 772.85, respectively, in trade so far. Later, the share price of the company closed 4.15 per cent down at Rs 793.05.
At the investor meet, the company management acknowledged weak demand in US truck and O&G segments and said it expects to maintain revenues as compared to FY15 driven by ramp up of passenger vehicle business. The company added that there is a sharp volume drop in commodity and allied business (Construction, mining, oil and gas).
“The company’s near term revenue traction will be weak (flat FY16 revenues), management reiterated its guidance of – a) doubling standalone revenues to Rs 70bn by FY18; b) becoming net debt free by 2018; and c) increase passenger vehicle revenue share from 5 per cent to 15 per cent,” accordign to brokerage house JM Financial.
The brokerage house also maintained its ‘Hold’ rating at a target price of Rs 925 as it remained confident on Bharat Forge’s medium-to-long term growth story. However, it sees share price ranged in the near term due to – low visibility on demand recovery, earnings downgrade risk and elevated valuations.