Is Now An Opportune Moment To Examine Bharat Forge Limited (NSE:BHARATFORG)?

Bharat Forge Limited (NSE:BHARATFORG), is not the largest company out there, but it saw significant share price movement during recent months on the NSEI, rising to highs of ₹748 and falling to the lows of ₹604. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Bharat Forge's current trading price of ₹661 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Bharat Forge’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Bharat Forge

What is Bharat Forge worth?

Bharat Forge appears to be overvalued by 31% at the moment, based on my discounted cash flow valuation. The stock is currently priced at ₹661 on the market compared to my intrinsic value of ₹503.72. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Bharat Forge’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Bharat Forge look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 69% over the next couple of years, the future seems bright for Bharat Forge. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? BHARATFORG’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BHARATFORG should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BHARATFORG for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for BHARATFORG, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Bharat Forge, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for Bharat Forge (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.

If you are no longer interested in Bharat Forge, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.