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Bharat Forge
Bharat Forge (BFL) reported a 53.1% yoy jump in standalone revenue at `777cr, largely
aided by a ~35% jump in domestic revenue and around ~81% jump in exports. Volume in
tonnage terms increased by ~37% yoy and ~4.5% qoq to ~48,000mt, while average net
realisation moved up by around ~11% yoy and ~3.5% qoq. Non-auto revenue in the
standalone business grew by 121% yoy and its contribution increased to 37% (26% in
3QFY2010) in 3QFY2011. EBITDA margin on a standalone basis remained at 2QFY2011
levels and expanded by 86bp yoy to 24.3%, despite surge in steel prices. BFL recorded a
117.5% yoy jump in net profit to `82.6cr, beating our estimate of `68.1cr for 3QFY2011,
owing to higher-than-expected performance at the operating level and higher other income.
On a consolidated basis, BFL reported 50.2% yoy top-line growth to `1,235cr, which was
above our expectation of `1,179cr and was largely aided by the substantial jump in
domestic operations. EBITDA margin for 3QFY2011 came in 32bp above our estimate at
18.1%, a jump of 151bp yoy on improved operating leverage in both domestic and overseas
operations. The company reported a 190.5% yoy (on low base of last year) jump in net profit
to `73.3cr (`25.2cr in 3QFY2010), as against our estimate of `67cr, largely aided by
improved operating performance.
A substantial portion of BFL’s revenue came from the CV segment, which currently is in midcycle.
Moreover, a major portion of the company’s consolidated revenue came from the US,
which has been in recessionary mode and is expected to come out of it in mid-2011. BFL’s
non-auto business is also expected to start contributing more from FY2011 and mitigate the
effects of the slowdown in the auto segment. Further, BFL has entered into a JV with Alstom
and NTPC to manufacture state-of-the-art supercritical power plant equipment in India. This
JV will help the company show healthy performance at the consolidated level.
We await more clarity on BFL’s overseas operations and progress on the JVs to revisit our
estimates. However, we maintain our Accumulate rating on the stock to play the turnaround
of developed markets (US and Europe). We would be releasing a detailed result update post
the earnings call with the management.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharat Forge
Bharat Forge (BFL) reported a 53.1% yoy jump in standalone revenue at `777cr, largely
aided by a ~35% jump in domestic revenue and around ~81% jump in exports. Volume in
tonnage terms increased by ~37% yoy and ~4.5% qoq to ~48,000mt, while average net
realisation moved up by around ~11% yoy and ~3.5% qoq. Non-auto revenue in the
standalone business grew by 121% yoy and its contribution increased to 37% (26% in
3QFY2010) in 3QFY2011. EBITDA margin on a standalone basis remained at 2QFY2011
levels and expanded by 86bp yoy to 24.3%, despite surge in steel prices. BFL recorded a
117.5% yoy jump in net profit to `82.6cr, beating our estimate of `68.1cr for 3QFY2011,
owing to higher-than-expected performance at the operating level and higher other income.
On a consolidated basis, BFL reported 50.2% yoy top-line growth to `1,235cr, which was
above our expectation of `1,179cr and was largely aided by the substantial jump in
domestic operations. EBITDA margin for 3QFY2011 came in 32bp above our estimate at
18.1%, a jump of 151bp yoy on improved operating leverage in both domestic and overseas
operations. The company reported a 190.5% yoy (on low base of last year) jump in net profit
to `73.3cr (`25.2cr in 3QFY2010), as against our estimate of `67cr, largely aided by
improved operating performance.
A substantial portion of BFL’s revenue came from the CV segment, which currently is in midcycle.
Moreover, a major portion of the company’s consolidated revenue came from the US,
which has been in recessionary mode and is expected to come out of it in mid-2011. BFL’s
non-auto business is also expected to start contributing more from FY2011 and mitigate the
effects of the slowdown in the auto segment. Further, BFL has entered into a JV with Alstom
and NTPC to manufacture state-of-the-art supercritical power plant equipment in India. This
JV will help the company show healthy performance at the consolidated level.
We await more clarity on BFL’s overseas operations and progress on the JVs to revisit our
estimates. However, we maintain our Accumulate rating on the stock to play the turnaround
of developed markets (US and Europe). We would be releasing a detailed result update post
the earnings call with the management.
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