HDFC Securities is bullish on Ramkrishna Forgings has recommended buy rating on the stock with a target price of Rs 908 in its research report dated September 10, 2018.
HDFC Securities' research report on Ramkrishna Forgings
Ramkrishna Forgings (RMKF) sailed through tough times and posted impressive recovery in FY18. During FY15-FY17, RMKF's profits dropped substantially (APAT slid from Rs 673mn in FY15 to Rs 110mn in FY17) owing to (1) Slowdown in US class 8 trucks, (2) Delayed ramp-up of its new plant due to elongated approval time from OEM's, and (3) Sharp jump in interest/depreciation cost driven by capex of Rs 7bn for new press line. However, there was earnings revival in FY18. With ramp-up in its heavy‐tonnage press line, RMKF has evolved from relatively low‐end forgings into complex and heavy components (front axles, bell crank, connecting rods, crankshafts, and knuckles). This has opened opportunities across the US, Europe and India.
Outlook
We value the stock Rs 908 (18x Sept-20E EPS) and recommend a BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More