UBS is starting to buy into this major auto cap segment; the stock goes up
Shares of Ramkrishna Forgings in Tuesday’s trade soared to record highs after global brokerage UBS initiated its listing in the stock at a target price of Rs 1,500. The set target means an increase of 46 percent.
The brokerage believes that the company by moving from a pure fake company to a complete solution provider, expands the product portfolio by diversification and increases the value chain.
At last count, shares of the auto company traded with gains of over 1 percent at Rs 1,043.3 or Rs 13.55 per share on the BSE, while they touched a record high of Rs 1,064 apiece.
Last month, the company got approval from its board to set up an aluminum plant in Jamshedpur. The Board of Directors also approved an investment of Rs 57.5 crore to set up the facility, which will cater mainly to the EV Market. The project will be established with an installed capacity of 3,000 MT per annum and is expected to be commissioned by Q2 FY26. At maximum capacity the project will generate an additional revenue of Rs. 175 million per year for the company.
Future capacity expansions, client additions, significant order wins and recent acquisitions provide earnings visibility.
The brokerage said the visible earnings drivers mean earnings improvement. In addition, UBS added that the global market share remains in the low single digits, which means long-term growth. Also, it added that previous growth drivers remain important.
Consider that the consensus does not include RK Forgings’ strengths or potential growth drivers, it added.
The maximum value of RK Forgings
The stock in the past one year has gained more than 55 percent, while in a week it has increased by more than 15 percent.
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