Bharat Forge hits eight-month low

The stock dipped 6% to Rs 962, its lowest level since January 13, 2015 on the National Stock Exchange.

Shares of Bharat Forge have dipped 6% to Rs 962, its lowest level since January 13, 2015 on the National Stock Exchange (NSE).

According to media reports, Bank of America Merill Lynch has slashed target price of Bharat Forge by 16% to Rs 900 per share as weaker demand drives de-rating.

Post April-June (Q1FY16) quarter results the stock has underperformed the market by falling 17% from Rs 1,165 on August 3, compared to 8.8% decline in the CNX Nifty.

Mitul Shah, analyst at Karvy Stock Broking said, the company's geographical and segmental revenues indicate near term challenging business environment in domestic as well as global markets.

“We expect muted performance from domestic business in H1FY16 (April-September) and growth in export business to taper down for a while. High performance of Q1FY16 was influenced by low commodity price, favourable currency, product mix and lag effect of lower raw material cost benefit pass through. Therefore, its not the true reflection of company performance. We believe that maintaining high margins would be a challenge for the company in the current environment,” said analyst in a report dated August 3, 2015.

At 11:49 a.m., the stock was down 5.6% at Rs 969 on the NSE compared to 0.55% fall in the benchmark index. A combined 1.11 million shares changed hands on the counter on the NSE and BSE.