Bharat Forge shares scale past Rs 1,000 mark to hit fresh 52-week high; more upside possible?

Shares of Bharat Forge Ltd rose 2.33 per cent in Tuesday's trade to touch their one-year high of Rs 1,002. Today's upward move came after the company's wholly-owned defence arm, Kalyani Strategic Systems, bagged two export orders worth Rs 850 crore. "Kalyani Strategic has bagged two export orders aggregating to Euro 93.87 million (Rs 850 crore) from friendly countries for supply of components and armoured vehicle chassis to be executed over an 18 months' timeframe. This is subject to necessary government approvals," Bharat Forge stated in an exchange filing.

Brokerage Nomura has assigned a 'Buy' call for Bharat Forge with a target price of Rs 1,157. There is a strong possibility for the company to evolve into a prominent exporter of defence components and systems originating in India, the brokerage said.

Ashika Stock Broking said the stock could head towards Rs 1,090 level in the coming few weeks. "Bharat Forge has generated a breakout above its last nine-month range of Rs 900-750, signalling continuation of the up move," it stated.

Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities, told BT TV that Bharat Forge has sizeable defence and aerospace orders. "We are also expecting growth in private vehicle exports," Vakil said. The stock may deliver 10-15 per cent returns over the long-term, the market expert added.

On technical setup, the counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 72.63. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 40.95 against a price-to-book (P/B) value of 5.92.

The scrip has an average target price of Rs 978, Trendlyne data showed, suggesting a potential downside of 2 per cent. It has a one-year beta of 0.93, indicating low volatility on the counter.

Around 85,000 shares changed hands today on BSE, higher than the two-week average volume of 82,000 shares. Turnover on the counter came at Rs 8.44 crore, commanding a market capitalisation (m-cap) of Rs 46,522.17 crore.

There were 4,25,676 buy orders today against sell orders of 73,871 shares.

Bharat Forge is the flagship company of the $3 billion Kalyani Group. It serves several sectors including automotive, railways, aerospace, marine, oil & gas, power, construction and mining. It has transcontinental presence across 10 manufacturing locations spread across India, Germany, Sweden, France and North America.

Meanwhile, Indian equity benchmarks were slightly up in late deals today, led by gains in metals, consumer and automobile stocks.

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