Ramkrishna Forgings is paying dividends to its shareholders, and how! The shares of the firm, one of the largest manufacturer and exporter of CV forgings in India, are among the multibagger stocks of 2021, with a return of 151 per cent in year-to-date (YTD) terms.
Citing an analysis by brokerage firm Emkay, Mint reports that Ramkrishna Forgings’ share price could surge by over 28 per cent from current levels. The gains will be spurred by improving macros, pick-up in infra-spending, and the recovery in replacement demand.
“The company, founded in 1981, has been a growth leader with revenue/EBITDA CAGRs of 12 per cent/13 per cent in the past 10 years, outpacing the industry and its larger peer Bharat Forge," Emkay said.
Headquartered at Kolkata, Ramkrishna Forgings has state-of-the-art manufacturing facilities at Jamshedpur along with offices at Detroit in USA, Toluca and Monterrey in Mexico, Istanbul in Turkey having warehousing facilities at Hagerstown, Louisville, Detroit in USA, Toluca, Monterrey in Mexico and Westerloo in Belgium.
The company is expected to deliver a topline CAGR of 33 per cent with revenues reaching Rs 30 billion by FY24E on CV upcycle and improving share in the domestic and overseas markets, the report said.
Emkay has maintained a buy rating for the stock with a target price of Rs 1,530 per share. The brokerage is upbeat about the stock in view of continued order wins and acquisition of automotive components maker ACIL.
Additionally, Emkay has forecast an incremental revenue of up to Rs 5 billion in FY23E/24E on the back of supplier contracts secured recently.
Looking at the bigger picture, the Indian MHCV industry may well grow at 30 per cent volume CAGR in the next three years if the current trend holds.