Stock To Buy: HDFC Securities Bets On Kalyani Group Stock, Sees 23% Upside Potential

HDFC Securities bets on Bharat Forge Ltd. with a positive view, assign a Buy on the stock with a market price of Rs 998 apiece. The stock is showing a potential upside of up to 23% from its current level, according to the brokerage's assigned target price.

Bharat Forge is a midcap Auto Ancillary sector company, a part of the Kalyani Group. The company is engaged in the manufacturing and selling of forged and machined Compoundant for the auto and industry sector. It has a market capitalisation of Rs 38,010.49 crore.

Valuation and view

According to HDFC Securities, "Management has set targets for FY30, which include: 1) revenue growth of 12-15% CAGR 2) sustainable consolidated EBIDTA margin above 20% 3) consolidated RoCE at 25%. Its target to have stable revenue growth over long term is also testimony to the fact that it has been able to transform itself from a cyclical entity to a stable revenue stream, given its well-diversified mix. "Overall, we expect BHFC's EPS to sharply improve to INR 40 by FY25E, from INR 12 per share in FY23. At 20.5x FY25 earnings, BHFC appears attractive relative to its peers. Maintain Buy with an unchanged TP of INR 998 per share (15x FY25 EPS)," the brokerage has said.

Stock Movement

The shares of Bharat Forge on BSE last traded at Rs 816.55 apiece, down Rs 2.55 or 0.31% from its previous close. It touched the 52-week high on Dec 15, 2022, at Rs 919.50 apiece and 52-week low on Jul 12, 2022, at Rs 630 apiece, respectively.

The stock surged 0.26% in 1 week. It surged 6.36% in 1 month. In 1 year, it jumped 24.04%. It gave a positive return of 10.56% in 2 years, 131.55% in 3 years, and 35.73% in 5 years, respectively.

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.