The broking firm Motilal Oswal has cut the earnings estimates on Bharat Forge by 7% for FY24 and 6% for FY25. However, the brokerage maintained the “Buy” rating on the stock with an unchanged target price of Rs 1,315. It cut the rating estimates due to the poor demand in auto exports.
“…it is worth noting that the underlying macro environment in the US and EU is showing signs of weakness,” said the brokerage house in a research report.
The brokerage believes the company’s consolidated revenue to grow by 10% over FY23-26 and net profit by 54% during the same period.
The company’s defence segment will see significant growth and execution already in place. Also, It sees a lot of opportunity for the company in the e-mobility sector “but the competitive landscape is yet to evolve.”
Also, another broking firm JM Financial has cut the consolidated earnings estimate for the company by 2% for FY25 owing to the weakness in the commercial vehicle demand globally.
The brokerage has kept the rating unchanged to “Buy” on the company’s stock. It has a target price of Rs 1,150 on the stock of the company.
Domestic demand is also expected to remain muted due to the general elections. However, the company’s strong growth in defence and aerospace is likely to support its performance.
“While the growth is expected to moderate in the near-term, we see long-term triggers intact, like the steady CV cycle in the US and India and strong ramp-up of PV, Aerospace, and Defence vertical,” said JM Financial in a research report.