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B r i l l i a n t p e r f o r m a n c e . . . O u t l o o k o p t i m i s t i c …
Bharat Forge (BFL) reported an outstanding set of numbers which
reflected the benefits of a de-risked business model. The net sales for
Q1FY12 were slightly below our estimates at | 829.3 crore (I-direct
estimate: | 837.4 crore), up 36.3% YoY and 4.2% QoQ boosted by higher
tonnage sales (~24% YoY rise). Domestic revenue recorded an increase
of ~280 bps QoQ coupled with higher realisation on a blended basis due
to improving maching mix. Consolidated revenues jumped to | 1583.2
crore, 37.1% YoY growth with strong demand from the US and European
CV markets combined with high traction from the non-auto segment. The
company posted robust EBITDA margin of 24.3% (I-direct estimate:
24.5%). On the subsidiaries front, EBITDA margins remained flat on a YoY
basis at 5.6% with the management focusing on margin expansion to
double digit in ~18 months time. The PAT came in line with our estimates
at | 97.4 crore (I-direct estimate: | 95.4 crore) a jump of 63.9% YoY .
Highlights of the quarter
This quarter witnessed strong performance from standalone operations
with total revenues and PAT escalating by 36.3% and 63.9% respectively
on a YoY basis. Despite a drop of 10% sequential dip in auto volumes, th
domestic revenues managed to grow by 18.6% YoY and 2.8% QoQ to
|488.7 crores. The company continues to post impressive export
numbers with growth of 67.1% YoY to |381.1 crore. The growth was seen
on both the automotive and non-automotive divisions. The company’s
overseas business observed good traction on the back of strong auto and
non-auto demand from both the US and European markets with revenues
soaring by 38.1% YoY to | 710.8 crore. The non-auto segment continued
to march ahead with growth in revenues to the tune of 51.3% on a YoY
basis backed by sizeable order flows.
V a l u a t i o n
We have accounted a slower up-tick in the domestic M&HCV segment
and continue to remain positive on export markets. At the CMP of | 293,
the stock is trading at 18.5x FY12E and 13.3x FY13E consolidated EPS.
Using SOTP, we have valued the standalone business at 14.5x FY13 EPS
of | 22.2 at | 308/share, subsidiaries at 5.0x FY13 EPS of | 0.8 at | 4/share
and Alstom JV at 8x FY13 EV/EBITDA at | 36/share.Our target price of |
348 implies an upside potential of 19%. We maintain BUY rating on BFL
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B r i l l i a n t p e r f o r m a n c e . . . O u t l o o k o p t i m i s t i c …
Bharat Forge (BFL) reported an outstanding set of numbers which
reflected the benefits of a de-risked business model. The net sales for
Q1FY12 were slightly below our estimates at | 829.3 crore (I-direct
estimate: | 837.4 crore), up 36.3% YoY and 4.2% QoQ boosted by higher
tonnage sales (~24% YoY rise). Domestic revenue recorded an increase
of ~280 bps QoQ coupled with higher realisation on a blended basis due
to improving maching mix. Consolidated revenues jumped to | 1583.2
crore, 37.1% YoY growth with strong demand from the US and European
CV markets combined with high traction from the non-auto segment. The
company posted robust EBITDA margin of 24.3% (I-direct estimate:
24.5%). On the subsidiaries front, EBITDA margins remained flat on a YoY
basis at 5.6% with the management focusing on margin expansion to
double digit in ~18 months time. The PAT came in line with our estimates
at | 97.4 crore (I-direct estimate: | 95.4 crore) a jump of 63.9% YoY .
Highlights of the quarter
This quarter witnessed strong performance from standalone operations
with total revenues and PAT escalating by 36.3% and 63.9% respectively
on a YoY basis. Despite a drop of 10% sequential dip in auto volumes, th
domestic revenues managed to grow by 18.6% YoY and 2.8% QoQ to
|488.7 crores. The company continues to post impressive export
numbers with growth of 67.1% YoY to |381.1 crore. The growth was seen
on both the automotive and non-automotive divisions. The company’s
overseas business observed good traction on the back of strong auto and
non-auto demand from both the US and European markets with revenues
soaring by 38.1% YoY to | 710.8 crore. The non-auto segment continued
to march ahead with growth in revenues to the tune of 51.3% on a YoY
basis backed by sizeable order flows.
V a l u a t i o n
We have accounted a slower up-tick in the domestic M&HCV segment
and continue to remain positive on export markets. At the CMP of | 293,
the stock is trading at 18.5x FY12E and 13.3x FY13E consolidated EPS.
Using SOTP, we have valued the standalone business at 14.5x FY13 EPS
of | 22.2 at | 308/share, subsidiaries at 5.0x FY13 EPS of | 0.8 at | 4/share
and Alstom JV at 8x FY13 EV/EBITDA at | 36/share.Our target price of |
348 implies an upside potential of 19%. We maintain BUY rating on BFL
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