Bharat Forge, RK Forgings Shares Jump As Sales Of U.S. Class 8 Trucks Rise
A Carvana Co. delivery flatbed truck sits parked at a location in Westminster, California, U.S. (Photographer: Patrick T. Fallon/Bloomberg)

Bharat Forge, RK Forgings Shares Jump As Sales Of U.S. Class 8 Trucks Rise

Shares of Bharat Forge Ltd. and Ramkrishna Forgings Ltd. surged as sales of heavy trucks rose in the U.S.

Orders for class 8 trucks in the U.S. rose 165% over the year earlier to 52,100 units in December 2020, according to data from FTR Transport Intelligence. Month-on-month, however, sales fell 1%.

With this, the overall truck orders for the year 2020 stood at 2.82 lakh units compared with 1.78 lakh units in 2019 — a rise of 58%.

Bharat Forge in November had said it remained bullish on an increase in demand for class 8 trucks in the U.S., which had then surged to a two-year high. “It’s a big positive for us, and we see a lot of potential and positive momentum,” Deputy Managing Director Amit Kalyani had said during an analyst call. “For volumes to go up, you need significant economic activity and capital formation to start taking place,” Kalyani had said. “When those big projects and infrastructure start, it is when there will be an improvement in the overall market.”

Shares of Bharat Forge gained as much as 7.4% to Rs 589 apiece — the highest since Nov. 19, 2018. Of the 31 analysts tracking the stock, 12 have a ‘buy’ rating, 11 suggest a ‘hold’ and the remaining eight recommend a ‘sell’. The stock is trading 14% higher than its Bloomberg consensus 12-month price target of Rs 498.7 apiece.

Shares of Ramkrishna Forgings gained as much as 9% to Rs 556.9 apiece —the highest since March 13, 2019. Of the six analysts tracking the company, three have a ‘buy’ rating, two suggest a ‘hold’ and one recommends a ‘sell’. The stock is trading 33.7% higher than its Bloomberg consensus 12-month price target of Rs 358.

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