Global demand headwinds could weigh on Bharat Forge

Analysts revise EPS estimates; valuations at long-term averages limiting upsides

-  RAM PRASAD SAHU

Even though Bharat Forge's performance in the July-September quarter broadly met Street estimates and defence orders are on the rise, the subdued outlook for its global business has prompted some brokerages to adopt a cautious stance on the company.

Analysts have reduced the company's earnings per share (EPS) estimates to account for the slow recovery of its overseas subsidiaries. Valuations are also trading at long-term averages, which could limit potential upsides.

The revenue performance for the standalone operations was robust, with a 21 per cent growth. This was driven by a 19-quarter high volume of 70,316 tonnes, up 15 per cent from the yearago quarter.

Realisations also saw a 5 per cent increase to 3.2 lakh, thanks to a better product mix.

While the automotive segment grew by 15 per cent year-on-year (Y-o-Y), the industrial segment's growth was more than twice that.