This multibagger stock is up 150% this year. MK sees up over 28%

The brokerage expects the share price of Ramkrishna Forgings to rise by over 28% from the current levels. It believes that improving macros in the underlying India MHCV industry, pick-up in infra-spending, and improvement in replacement demand should drive 30% volume CAGR in FY21-24E.

Emkay has launched coverage on Multibagger stock with buy rating and target price of ₹1,530 per share, and according to the brokerage, further increases in the stock’s target price could result from continued order wins and the acquisition of ACIL which could add to the fair value. However, it added that the major downside risks are delay in auto sector/ macro recovery, customer concentration risk and unfavorable currency.

“The company, established in 1981, has been a growth leader with a Revenue/EBITDA CAGR of 12%/13% over the last 10 years, surpassing the industry and its larger counterpart Bharat Forge,” Emkay said in a note.

Historically, RMKF has outpaced industry growth, driven by customer addition and higher content per vehicle. The company has been able to meet the quality and cost requirements of marquee customers, resulting in increased market share in India, USA and Europe. The note added that RMKF is expanding its presence in the LCV segment and also in industrial sectors such as Railways, Oil & Gas and Construction Equipment.

Emkay expects Ramakrishna Forgings to deliver 33 per cent topline CAGR with revenue ₹30 billion by FY24E on CV upcycle and improving share in domestic and overseas markets. incremental revenue up to ₹5 billion is expected from recent order wins in FY 23E/24E, it added.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.