India’s Auto Parts Suppliers’ Stocks Jump As Sales Of U.S. Class 8 Trucks Rise

Shares of Bharat Forge Ltd., Ramkrishna Forgings Ltd. and GNA Axles Ltd. gained as sales of heavy trucks rose in the U.S.

Orders for class 8 trucks in the U.S. jumped threefold over the year earlier and 2.8% month-on-month to 44,000 units in February 2021, according to a statement by FTR Transport Intelligence. Orders for the previous 12 months, it said, total 3.56 lakh units.

“Fleets continue to place orders out to the end of the year to acquire trucks as they become available,” the statement said, adding this year will be robust for class 8 sales.

Leading global premium truckmaker Paccar Inc, according to a note by Emkay Global, expects class 8 industry retails to range between 2.5 lakh and 2.8 lakh units in2021, higher than the earlier expectation of 2.3-2.7 lakh units. The company expects a pick-up in economic activity, strong order book, robust e-commerce segment and replacement demand to drive growth in FY21.

“Our positive view is underpinned by Bharat Forge's leadership position in automotive forgings, focus on diversification and an expected recovery in core segments," Emkay said in its Feb. 22 note.

Shares of Bharat Forge gained as much as 2.1% in early trade on Wednesday to Rs 650 apiece. The stock is up for the third straight session.

• Of the 31 analysts tracking the company, 14 have a ‘buy' rating, nine suggest a ‘hold' and eight recommend a ‘sell', according to Bloomberg data.
• The stock crossed its 12-month consensus price target of Rs 636.7 on Wednesday.

Shares of Ramkrishna Forgings gained as much as 4.3% to Rs 589.7 apiece—the highest in a month. The stock is up for the second day.

• Of the four analysts tracking this company, three recommend a ‘buy' rating and one suggests a ‘sell'.
• The stock trades 9% higher than its 12-month consensus price target of Rs 526.

Shares of GNA Axles gained as much as 2.7% to Rs 400.3 apiece.

• All the four analysts tracking the stock suggest a ‘buy'.
• The average of Bloomberg consensus 12-month price target implies an upside of 11.5%.