- Date : 29/08/2023
- Read: 3 mins
Learn why Nomura thinks Bharat Forge is undervalued and how it boosted the stock to a 52-week high. Read this article to find out more.
Bharat Forge, a leading player in the defence industry, has reached a remarkable milestone as its stock hits a 52-week high. Nomura, a renowned foreign brokerage firm, has identified the stock as attractively valued, citing the continuous growth of Bharat Forge's defence vertical and the impressive 31 per cent compounded annual growth in Earnings Per Share projected over FY24-26. Adding to the company's success, it's wholly owned subsidiary recently secured orders worth Rs 850 crore. In this article, we delve deeper into the factors driving Bharat Forge's soaring stock and explore the exciting potential that lies ahead.
Company’s stock at all-time-high.
Nomura finds the company attractively valued.
10 manufacturing locations globally.
FY24-26 projection impressive (31% EPS growth).
Bharat Forge's recent achievements and positive financial performance make it an attractive investment opportunity. With its stock reaching a 52-week high and being identified as attractively valued by Nomura, the company's continuous growth in the defence vertical and projected 31 per cent compounded annual growth in Earnings Per Share over FY24-26 are promising indicators. However, investors should also be aware of the risks and uncertainties that may affect the company’s future performance, such as the delays in project execution, changes in policy and more.
About Bharat Forge
Bharat Forge is a $3 billion global forging company with 10 manufacturing locations across India, Germany, Sweden, France and North America. It serves the automotive, railways, aerospace, marine, oil & gas, power, construction and mining sectors.
Given above is a one-year price chart of Bharat Forge. Currently, the company is trading at all-time high of Rs. 1064.
Financial performance in Q1 of FY2023-24
- Bharat Forge Q1 net profit up 27.8% YoY to Rs 311.5 crore
- Revenue rises to Rs 2,127.3 crore from Rs 1,759.4 crore a year ago
- Margin improves to 25.79%, slightly below analysts’ expectation of 26.7%
Why is Nomura bullish in Bharat Forge?
Nomura is bullish on the company for the following reasons:
Bharat Forge's stock is a good investment because the company's earnings per share are expected to grow by 31% annually from 2024 to 2026.
Bharat Forge's defence business is expanding, and Nomura predicts that the company's defence order book will increase to around Rs 3,300-3,400 crore. This indicates that Bharat Forge is receiving more orders for defence-related products. Company’s management has stated that they will fulfil the defence order book over a period of two years.
The company recently won export orders worth Rs 850 crore. These orders were secured by Bharat Forge's defence subsidiary, Kalyani Strategic Systems, and involve supplying components and armoured vehicle chassis to friendly countries over 18 months.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax advice.
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