Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Global scale and presence
Over the past decade, Bharat Forge Ltd. (BFL) has evolved into an Indian MNC with
sizeable forging operations carried out in India, China, EU and US. With impressive
capabilities, BFL services a multitude of clients across sectors and geographies. With
relatively low geographical and client concentration, it has fortified operations in the
aftermath of the economic downturn of FY09-10, by adding capacities and beefing
up its product profile over the past two years to further de-risk its revenue and profits.
Domestic business to get stronger
Apart from augmenting its forging and machining capacity in India, BFL intends to
improve its profitability by increasing revenues from machining, thereby capturing a
larger part of the value chain. By playing the twin theme of economies of scale and
value addition, its Indian operations are set to witness an increase in profitability.
International operations have turned the corner
Over the past 5-6 quarters, BFL has been relentlessly restructuring its international
operations. The company has lowered its breakeven utilisation, pruned its workforce
and rationalised its working capital systems, in order to achieve a cash neutral status at
worst, thereby averting the danger of recapitalisation by the Indian parent.
Valuation and outlook
At the CMP of INR321, BFL is trading at a PE of 11.4x and EV/EBIDTA of 5.3x
discounting its FY14e earnings. The company’s free cash flows are set to experience a
marked improvement. Given the profile of its operations and its buoyant prospects, we
firmly believe that BFL is comfortably placed to deleverage as well as invest in its
promising new ventures like power equipment manufacturing. We initiate coverage on
the stock with a BUY recommendation and our valuations provide us a with target price
of INR410, which represents an upside of 28% from the current levels
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Global scale and presence
Over the past decade, Bharat Forge Ltd. (BFL) has evolved into an Indian MNC with
sizeable forging operations carried out in India, China, EU and US. With impressive
capabilities, BFL services a multitude of clients across sectors and geographies. With
relatively low geographical and client concentration, it has fortified operations in the
aftermath of the economic downturn of FY09-10, by adding capacities and beefing
up its product profile over the past two years to further de-risk its revenue and profits.
Domestic business to get stronger
Apart from augmenting its forging and machining capacity in India, BFL intends to
improve its profitability by increasing revenues from machining, thereby capturing a
larger part of the value chain. By playing the twin theme of economies of scale and
value addition, its Indian operations are set to witness an increase in profitability.
International operations have turned the corner
Over the past 5-6 quarters, BFL has been relentlessly restructuring its international
operations. The company has lowered its breakeven utilisation, pruned its workforce
and rationalised its working capital systems, in order to achieve a cash neutral status at
worst, thereby averting the danger of recapitalisation by the Indian parent.
Valuation and outlook
At the CMP of INR321, BFL is trading at a PE of 11.4x and EV/EBIDTA of 5.3x
discounting its FY14e earnings. The company’s free cash flows are set to experience a
marked improvement. Given the profile of its operations and its buoyant prospects, we
firmly believe that BFL is comfortably placed to deleverage as well as invest in its
promising new ventures like power equipment manufacturing. We initiate coverage on
the stock with a BUY recommendation and our valuations provide us a with target price
of INR410, which represents an upside of 28% from the current levels
No comments:
Post a Comment