BSE Code: | NSE Code: | ISIN: | Sector:
Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
|Target Hit|| Long (1Y)
Nomura maintains reduce on Bharat Forge
Nomura has maintained 'reduce' on Bharat Forge for target price of Rs 854. It says in the domestic M&HCV segment (16% of Bharat Forge's FY18F standalone revenues), we see structural headwinds to growth due to sharp (8-10%) increases in prices from 1 April 2017 on higher emission norms, pre-buying in March 2017, demand uncertainty and efficiency gains post GST implementation from July 2017. Thus, we have factored in a 5% decline in industry volumes in FY18F. New upcoming segments such as railways and aerospace are too small (1-2% of sales) to offset these in FY18F. The stock is currently trading at 34x/26x FY18F/19F EPS, after factoring in the 32% EPS CAGR over FY17-19F, which we believe is expensive. Maintain Reduce rating and TP of Rs 854.