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Strong performance at the standalone level: BHFC reported in-line 21.1% yoy
(3.4% qoq) growth in its standalone revenue to `941cr, driven by the strength of
its exports segment, which grew by 29.2% yoy (7.6% qoq). Strong growth in the
CV segment in the U.S. and Europe continued to drive exports revenue, which
grew by 35% and 27.3% yoy in the U.S. and Europe, respectively. Volumes in
tonnage terms increased by 15.2% yoy (3.1% qoq) to 55,412MT and net average
realization jumped by 6% yoy (1.5% qoq). EBITDA margin improved by 38bp yoy
(99bp qoq) to 24.7%, driven by favorable product mix, higher proportion of
machining component and operating leverage benefits. Net profit registered betterthan-
expected 24.9% yoy (down 3% qoq) growth to `103cr, led by stable operating
performance. However, forex loss of `9.1cr on forward contracts on exports led to
lower other income (down 73.3% yoy and 83.8% qoq), which restricted profitability.
Consolidated performance impacted by China operations: The company’s top
line on a consolidated basis grew by healthy 14.2% yoy (2.6% qoq) to `1,599cr,
driven largely by standalone operations. China operations were impacted on
account of weakness in Chinese automotive market, leading to lower capacity
utilization. EBITDA margin improved by 97bp yoy (50bp qoq) to 16.8%, resulting
in a 17.7% yoy (down 3% qoq) increase in PBT to `151cr. Noticeably, China
operations reported loss at the PBT level of `2.2cr in 3QFY2012 (profit of `1.4cr
in 2QFY2012 and `5.7cr in 3QFY2011).
Outlook and valuation: We expect BHFC to register a 20.4% revenue CAGR over
FY2011-13E, led by revival in domestic CV sales and continued momentum in
exports and non-auto segments. Further, margins are expected to remain stable,
led by rationalization of overseas capacities and moderating raw-material prices,
leading to a strong 33.3% net profit CAGR over the same period. At `307, BHFC
is trading at 13.9x FY2013E earnings. We maintain our Accumulate rating on the
stock with a target price of `332, valuing it at 15x FY2013E earnings.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Strong performance at the standalone level: BHFC reported in-line 21.1% yoy
(3.4% qoq) growth in its standalone revenue to `941cr, driven by the strength of
its exports segment, which grew by 29.2% yoy (7.6% qoq). Strong growth in the
CV segment in the U.S. and Europe continued to drive exports revenue, which
grew by 35% and 27.3% yoy in the U.S. and Europe, respectively. Volumes in
tonnage terms increased by 15.2% yoy (3.1% qoq) to 55,412MT and net average
realization jumped by 6% yoy (1.5% qoq). EBITDA margin improved by 38bp yoy
(99bp qoq) to 24.7%, driven by favorable product mix, higher proportion of
machining component and operating leverage benefits. Net profit registered betterthan-
expected 24.9% yoy (down 3% qoq) growth to `103cr, led by stable operating
performance. However, forex loss of `9.1cr on forward contracts on exports led to
lower other income (down 73.3% yoy and 83.8% qoq), which restricted profitability.
Consolidated performance impacted by China operations: The company’s top
line on a consolidated basis grew by healthy 14.2% yoy (2.6% qoq) to `1,599cr,
driven largely by standalone operations. China operations were impacted on
account of weakness in Chinese automotive market, leading to lower capacity
utilization. EBITDA margin improved by 97bp yoy (50bp qoq) to 16.8%, resulting
in a 17.7% yoy (down 3% qoq) increase in PBT to `151cr. Noticeably, China
operations reported loss at the PBT level of `2.2cr in 3QFY2012 (profit of `1.4cr
in 2QFY2012 and `5.7cr in 3QFY2011).
Outlook and valuation: We expect BHFC to register a 20.4% revenue CAGR over
FY2011-13E, led by revival in domestic CV sales and continued momentum in
exports and non-auto segments. Further, margins are expected to remain stable,
led by rationalization of overseas capacities and moderating raw-material prices,
leading to a strong 33.3% net profit CAGR over the same period. At `307, BHFC
is trading at 13.9x FY2013E earnings. We maintain our Accumulate rating on the
stock with a target price of `332, valuing it at 15x FY2013E earnings.
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