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Bharat Forge - Strong traction in exports
Sequential recovery in standalone top‐line driven by robust exports: Bharat
Forge (BFL) reported 8.1% QoQ growth in its top‐line at Rs7.7bn on account of a
sequential improvement of 31.1% in export revenues at Rs3.6bn. Tonnage
production for the quarter stood at 48,116MT compared to 46,140MT in
Q2FY11. EBITDA was in line with our estimate at Rs1.8bn, whereas EBITDA
margin improved by 10bps QoQ on account of robust top‐line. Due to higherthan‐
expected other income and lower interest cost, PAT doubled to Rs826m
(our estimate Rs730m).
Overseas subsidiaries report 16.7% QoQ growth in revenues: The subsidiaries
reported a top‐line of Rs4.6bn for Q3FY11 (Rs3.9bn in Q2FY11). Overseas
subsidiaries reported an EBITDA of Rs346m and an EBITDA margin of 7.5% (an
improvement of 240bps QoQ), with a loss of Rs12m (loss of Rs74m in Q2FY11).
Consolidated EBITDA improves 60bps QoQ: Top‐line, on a consolidated basis,
grew by 11.2% sequentially, with EBITDA performance improving by 14.9% QoQ.
Consolidated EBITDA margins improved by 60bps sequentially at 18.1% on
account of strong performance on the subsidiaries front. Adj. PAT, on a
consolidated basis for Q3FY11, stood at Rs814m (Rs607m in Q2FY11).
Outlook and Valuation: Operating leverage, coupled with higher utilization at
the new non‐auto facility in FY12E, will lead to EBITDA margins in excess of 25%
on a standalone basis by FY12E. We value the company on SOTP basis, with
standalone business valued at Rs354/share and subsidiaries/JVs valued at
Rs61/share. With a strong traction in the domestic as well as export markets
and the likely recovery in North America and Europe, we maintain ‘Accumulate’.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharat Forge - Strong traction in exports
Sequential recovery in standalone top‐line driven by robust exports: Bharat
Forge (BFL) reported 8.1% QoQ growth in its top‐line at Rs7.7bn on account of a
sequential improvement of 31.1% in export revenues at Rs3.6bn. Tonnage
production for the quarter stood at 48,116MT compared to 46,140MT in
Q2FY11. EBITDA was in line with our estimate at Rs1.8bn, whereas EBITDA
margin improved by 10bps QoQ on account of robust top‐line. Due to higherthan‐
expected other income and lower interest cost, PAT doubled to Rs826m
(our estimate Rs730m).
Overseas subsidiaries report 16.7% QoQ growth in revenues: The subsidiaries
reported a top‐line of Rs4.6bn for Q3FY11 (Rs3.9bn in Q2FY11). Overseas
subsidiaries reported an EBITDA of Rs346m and an EBITDA margin of 7.5% (an
improvement of 240bps QoQ), with a loss of Rs12m (loss of Rs74m in Q2FY11).
Consolidated EBITDA improves 60bps QoQ: Top‐line, on a consolidated basis,
grew by 11.2% sequentially, with EBITDA performance improving by 14.9% QoQ.
Consolidated EBITDA margins improved by 60bps sequentially at 18.1% on
account of strong performance on the subsidiaries front. Adj. PAT, on a
consolidated basis for Q3FY11, stood at Rs814m (Rs607m in Q2FY11).
Outlook and Valuation: Operating leverage, coupled with higher utilization at
the new non‐auto facility in FY12E, will lead to EBITDA margins in excess of 25%
on a standalone basis by FY12E. We value the company on SOTP basis, with
standalone business valued at Rs354/share and subsidiaries/JVs valued at
Rs61/share. With a strong traction in the domestic as well as export markets
and the likely recovery in North America and Europe, we maintain ‘Accumulate’.
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