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India Equity Research Reports, IPO and Stock News
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Key takeaways
Demand outlook is very buoyant. The company guided for very strong demand
outlook on US and European exports driven by new TARP projects which are being
executed in US and new order wins in European market. Company expects to double
standalone revenues in the next three years, driven by (1) strong growth in non-auto
revenues and (2) sharp increase in US and European exports.
Capacity utilization expected to improve. The company indicated that capacity
utilization in India is at around 75% for the automotive business, 40-45% for the nonauto
business, 65-70% for China operations and 55% for the European operations. The
company plans to increase machining capacities by 50% over the next few years to
increase the value-added content of the product.
Subsidiaries expected to report profits in FY2012E: The company indicated that
subsidiaries are expected to report profits in FY2012E driven by improvement in demand,
increase in machining mix in the product mix. The company guided that EBITDA margins
in subsidiaries should improve from 5% to 10% in the next 2 years.
Update on Alstom joint venture. The company indicated that the Bharat Forge-Alstom
joint venture of turbine gensets will start commercial production from FY2013E and
company plans to achieve full utilization of capacity by FY2017E. The company has also
received letter of intent from NTPC for supplying turbine gensets for 5X 660 MW orders
that the Bharat Forge-Alstom JV won recently.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key takeaways
Demand outlook is very buoyant. The company guided for very strong demand
outlook on US and European exports driven by new TARP projects which are being
executed in US and new order wins in European market. Company expects to double
standalone revenues in the next three years, driven by (1) strong growth in non-auto
revenues and (2) sharp increase in US and European exports.
Capacity utilization expected to improve. The company indicated that capacity
utilization in India is at around 75% for the automotive business, 40-45% for the nonauto
business, 65-70% for China operations and 55% for the European operations. The
company plans to increase machining capacities by 50% over the next few years to
increase the value-added content of the product.
Subsidiaries expected to report profits in FY2012E: The company indicated that
subsidiaries are expected to report profits in FY2012E driven by improvement in demand,
increase in machining mix in the product mix. The company guided that EBITDA margins
in subsidiaries should improve from 5% to 10% in the next 2 years.
Update on Alstom joint venture. The company indicated that the Bharat Forge-Alstom
joint venture of turbine gensets will start commercial production from FY2013E and
company plans to achieve full utilization of capacity by FY2017E. The company has also
received letter of intent from NTPC for supplying turbine gensets for 5X 660 MW orders
that the Bharat Forge-Alstom JV won recently.
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