Bharat Forge slips on profit booking

Bharat Forge is currently the top loser on the BSE, down almost 5.5% or by Rs.73 at Rs.1228.50, closer to its intra day low of Rs.1226.

The stock has slipped down mainly on profit booking after it hit a new high recently at Rs.1362.90. Another reason, which could also be an ‘explanation’ for profit taking is the downgrade report put out by brokerage house, Bank of America Merrill Lynch – it pulled down the stock recommendation from buy to underperform. It also cut the target price by 10% to Rs.1130.

It has stated in the report that the downgrade is because it is worried about the recent decline in orders for heavy trucks from North America, which it says, will lead to slower exports of steel forgings by Bharat Forge to US truck and machinery sector. It seems a bit too far-fetched reasoning, more like a reason to exit, book profits when the price is good.