Hold Bharat Forge; target of Rs 430: Prabhudas Lilladher
Prabhudas Lilladher’s research report on Bharat Forge
We attended BHFC’s analyst meet. The management acknowledged short-term challenges in domestic CV industry as recovery in CV volumes expected only by 2HFY21 as well as weak auto exports as US and Europe heavy truck segment is expected to decline ~20% in FY21. However, customer addition in passenger car and ramp-up of new businesses would dilute the impact of weak CV segment. BHFC continues to focus on technology and intends to transform itself as component supplier to a solution provider. We believe ramp up in non-auto exports and increase in share of passenger car segment should partially negate impact of CV business slowdown.
We maintain Hold with a target price of Rs430, based on 18x Mar-21E consolidated EPS.
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