Shares of Ramkrishna Forgings Ltd hit their record high on Tuesday after Swiss brokerage UBS initiated coverage on the auto components major, stating its bullish stance on the company as visible earnings drivers imply the chance for upgrades. The Swiss brokerage issued a buy rating on the forgings player, with a target price of Rs 1,500, an upside of 46 per cent to the previous close.
The multibagger stock has risen 366% in two years and gained 1794% in five years.
Shares of Ramkrishna Forgings rose 3.32% to a high of Rs 1064 on BSE. The stock of the forged components maker opened higher at Rs 1056 against the previous close of Rs 1029.75. The stock fell to a 52-week low of Rs 583.20 on October 26, 2023. Total 0.71 lakh shares of the firm changed hands amounting to a turnover of Rs 7.43 crore in Tuesday’s session. Market cap of the firm rose to Rs 18,882 crore on BSE.
In terms of technicals, the relative strength index (RSI) of Ramkrishna Forgings stands at 60.4, signaling it's trading neither in the overbought nor in the oversold zone. Ramkrishna Forgings stock has a one-year beta of 1.1, indicating high volatility during the period. Ramkrishna Forgings shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages. "RK Forgings has a low single digit share in the global market, which indicates the company can cover a long runway for growth. The previous growth drivers of the firm also remain relevant," said UBS.
However, the firm's plan to transition from a pure forging company to a total assembly solution provider, expands the product portfolio via diversification and moves up the value chain.
The consensus opinion on RK Forgings does not factor in its capability or even its potential growth drivers, according to the Swiss brokerage.
Kolkata-based Ramkrishna Forgings is a manufacturer and supplier of closed-die forgings of carbon and alloy steel, micro-alloy steel and stainless steel forgings. The company operates through two segments: Forging components and others. The company's products include rolled products, forged products and machined products. The company supplies its products to various sectors, such as automotive, railways, farm equipment, bearings, oil and gas, power and construction, earthmoving, and mining, both in India and overseas markets.