Emkay Global Financial's research report on Bharat Forge
We attended the BHFC Analyst Meet, where Management re-iterated healthy mediumterm revenue prospects, supported by growth in the defense, aerospace, e-mobility and aluminium segments. In FY24, Management expects revenue growth to be strong in the domestic market, while a muted performance is expected in the overseas markets, especially for North-America Class8 trucks, European HCVs and construction equipment. BHFC has significant revenue exposure to the ICE engine and transmission components. Over the medium term, the company is focusing on increasing presence in EVs and Hydrogen vehicles, via initiatives such as: 1) component portfolio expansion; 2) electric 2W/3W vehicle assembly; and 3) retro-fitment of electric drivetrain to ICE vehicles.
Outlook
Considering the muted growth prospects in the overseas auto segment ahead and the limited upside potential, we retain our HOLD rating with target price of Rs820/share, based on 24x Dec-24E EPS for the standalone entity.
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