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3QFY2012 Result Update | Auto Ancillary

February 8, 2012

Bharat Forge
Performance Highlights
Y/E March Standalone (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

ACCUMULATE
CMP Target Price
3QFY11 777 189 24.3 83 % chg (yoy) 21.1 23.0 38bp 24.9 Angel est. 942 221 23.5 97 % diff. (0.1) 4.9 117bp 6.9

`307 `332
12 Months

3QFY12 941 232 24.7 103

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Auto Ancillary 7,157 1.1 371/231 60,201 2 17,707 5,368 BFRG.BO BHFC@IN

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 companys 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. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 42.1 30.3 8.4 19.2

Abs. (%) Sensex Bharat Forge

3m 0.8 5.5

1yr (0.4)

3yr 90.4

(5.5) 277.2

FY2010 3,286 (30.3) (63) 6.2 (2.8) 4.7 (4.1) (1.0) 2.5 41.8

FY2011 4,999 52.2 290 13.8 12.5 24.6 3.7 17.0 10.8 1.6 12.2

FY2012E 6,287 25.8 418 44.3 16.0 18.0 17.1 3.1 19.7 16.4 1.2 8.0

FY2013E 7,243 15.2 515 23.2 16.0 22.1 13.9 2.6 20.6 18.2 1.0 6.6

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

Bharat Forge | 3QFY2012 Result Update

Exhibit 1: Quarterly performance Standalone


Y/E March (` cr) Net sales Consumption of RM (% of sales) Staff costs (% of sales) Manufacturing exp. (% of sales) Other expenses (% of sales) Total expenditure EBITDA EBITDA margin (%) Interest Depreciation Other income PBT (excl. extr. items) Extr. income/(expense) PBT (incl. extr. items) (% of sales) Provision for taxation (% of PBT) Reported PAT PATM (%) Equity capital (cr) EPS (`)
Source: Company, Angel Research

3QFY12 941 412 43.8 60 6.3 164 17.4 73 7.8 709 232 24.7 32 56 3 147 147 15.7 44 30.0 103 11.0 46.6 4.4

3QFY11 777 354 45.5 52 6.7 131 16.8 52 6.7 588 189 24.3 30 50 121 121 15.6 39 32.0 83 10.6 46.6 3.5

% chg 21.1 16.6 14.8 25.2 41.2 20.5 23.0 6.8 12.5 21.4 21.4 14.0 24.9

9MFY12 2,709 1,209 44.6 182 6.7 470 17.3 192 7.1 2,053 656 24.2 93 161 39 440 440 16.2 133 30.2 307 11.3 46.6

9MFY11 % chg 2,126 965 45.4 146 6.9 353 16.6 144 6.8 1,609 517 24.3 92 145 31 311 311 14.6 101 32.4 210 9.9 46.6 9.0 46.1 46.1 32.0 1.2 11.0 23.9 41.5 41.5 27.6 26.8 33.8 32.9 24.2 27.4 25.3

13 (73.2)

24.9

13.2

Exhibit 2: Segmental performance Standalone


Y/E March (` cr) Revenue Steel forging Gen. engg., trading etc. Total segment revenue EBIT Steel forging Gen. engg., trading etc. Total EBIT (%) Steel forging Gen. engg., trading etc.
Source: Company, Angel Research

3QFY12 3QFY11 % chg 9MFY12 9MFY11 % chg 937 6 943 219 3 222 23.4 45.6 774 5 779 174 175 22.4 23.2 21.0 34.8 21.1 26.1 26.9 2,696 19 2,714 636 8 643 23.6 40.2 2,118 13 2,131 481 483 22.7 22.7 27.3 47.4 27.4 32.3 33.0

1 164.8

3 160.8

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Top line continues to grow on the strength of the exports segments performance: BHFC reported in-line 21.1% yoy (3.4% qoq) growth in its standalone revenue to `941cr, driven by the strength of the 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). Domestic revenue growth was in-line with the MHCV industrys growth during the quarter and registered an increase of 15.3% yoy (1.3% qoq). While non-auto revenue during the quarter increased by 12.7% yoy to `318cr, it remained flat sequentially on account of slowdown in capital investments in India. Non-auto contribution to the companys standalone revenue stood at 33.8% in 3QFY2012. New facilities contributed `189.5cr to the top line and grew by 55.5% yoy.

Exhibit 3: Domestic revenue up 15.3% yoy


(` cr) 600 500 400 300 200 100 0 48.5 35.0 34.3 17.4 5.2 15.3 Domestic revenue 100.3 85.0 59.5 yoy change (RHS) (%) 120 100 80 60 40 20 0

Exhibit 4: Exports revenue continues to remain strong


(`cr) 500 450 400 350 300 250 200 150 100 50 0 Export revenue 83.7 59.9 84.2 80.7 63.5 67.1 57.6 29.2 yoy change (RHS) (%) 100 80 60 40 20 (18.6) 0 (20) (40)

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12
Others 53

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Source: Company, Angel Research

Exhibit 5: Volume trend


(MT) 60,000 50,000 40,000 30,000 20,000 10,000 0 35.5 51.8 36.4 31.4 24.2 113.9 Volume (tonnage) yoy change (%) (%) 120.0 86.7 100.0 80.0 60.0 40.0 16.5 15.2 20.0 0.0

Exhibit 6: Geographical break-up of revenue


(%) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 26 12 1 22 15 1 18 16 2 19 16 3 23 20 5 1921 4 24 18 3 2123 4 25 21 4 India 61 61 64 US 62 52 Europe 56 56

3QFY12
50

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Source: Company, Angel Research

EBITDA margin improves to 24.7%: BHFCs 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. During the quarter, raw-material cost as a percentage of sales declined by 170bp yoy, offsetting the 110bp and 60bp yoy increase in other expense and manufacturing expenditure as a percentage of sales, respectively.

February 8, 2012

3QFY12

Bharat Forge | 3QFY2012 Result Update

Exhibit 7: EBITDA margin trend


(%) 50 45 40 35 30 25 20 15 10 5 0 EBITDA margin RM cost/net sales

Exhibit 8: Strong net profit growth of 24.9% yoy


(` cr) 120 11.2 9.8 7.7 9.7 Net profit (LHS) 11.0 Net profit margin (RHS) 12.6 12.1 11.7 (%) 14 11.2 12 10 8 6 4 2 0
3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

45.4

44.9

46.1

47.2

46.9

45.9

46.4

46.7

44.8

100 80 60

23.4

25.2

24.5

24.2

24.3

24.2

24.3

23.7

24.7

40 20 0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Source: Company, Angel Research

Forex loss restricts bottom-line growth: BHFC registered better-than-expected net profit growth of 24.9% yoy (down 3% qoq) 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) during the quarter.

Exhibit 9: Quarterly performance Consolidated


Y/E March (` cr) Revenue EBITDA EBITDA margin Reported PBT
Source: Company, Angel Research

3QFY12 1,599 268 16.8 151

3QFY11 % yoy chg 1,400 221 15.8 128 14.2 21.2 97bp 17.7

2QFY12 1,559 253 16.2 155

% qoq chg 2.6 5.8 50bp (3.0)

Healthy consolidated performance: BHFCs top line on a consolidated basis grew by healthy 14.2% yoy (2.6% qoq) to `1,599cr, driven largely by standalone operations. Operations in China during the quarter 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 as against profit of `5.7cr in 3QFY2011.

Exhibit 10: Top line up 14.2% yoy


(` cr) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12
(15.4) 47.3 37.0 25.3 14.2

Exhibit 11: EBITDA margin improves sequentially


yoy growth (RHS) (%) 80 70 60 50 40 30 20 10 0 (10) (20) (` cr) 300 250 200 150 100 50 0
3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Total revenue
66.3 75.2 70.2

EBITDA 18.7

EBITDA margin (RHS)

67.3

16.6 16.1 15.8 15.8

16.4 15.8

16.8 16.2

(%) 19 19 18 18 17 17 16 16 15 15 14

Source: Company, Angel Research

Source: Company, Angel Research

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Investment arguments
Domestic operations dependent on CV demand: BHFC, being a market leader in the CV space for products such as crankshaft, axle beams and connecting rods, with a ~90% market share, has been able to register robust growth sequentially. We expect the domestic CV industry to post a 14.5% CAGR over FY2011-13E, which augurs well for BHFC as it is a leading player in the domestic CV forging industry and nearly 55% of domestic revenue is derived from the segment. Improvement in overseas subsidiaries and JVs to boost consolidated performance: BHFCs international operations posted losses (pre-tax) in FY2010 due to a decline in demand and high operational costs. However, strong turnaround in Chinese JV (FAW-BF) and other subsidiaries due to restructuring and operational efficiencies led to improved performance and returned to profitability in FY2011. We expect international subsidiaries to sustain their growth momentum due to buoyant truck demand in the U.S. and Europe and increasing contribution from industrial forgings and improving utilization levels (currently 50-55%). Thrust on non-auto business to diversify product portfolio: BHFC intends to increase its non-automotive revenue to 40% (25% of consolidated revenue in FY2011) by FY2012E. To achieve this goal, BHFC has set up an 80MT hammer (40,000 TPA capacity) and a ring rolling (25,000 TPA capacity) facility in Baramati in addition to the existing 60,000 TPA non-auto facility in Mundhwa. We expect BHFC to benefit from new investments by various players in the power, oil and gas and capital goods sectors, leading to strong demand for non-automotive forgings.

Outlook and valuation


We expect BHFC to register a 20.4% revenue CAGR over FY2011-13E, led by revival in domestic CV sales, 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.

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Exhibit 12: Key assumptions


Y/E March Sales volume Steel Forgings (MT), (incl. Baramati) Crank shafts-finished machine (No.) Front axle assembly & comp. (No.) Utilization (%) Steel Forgings (MT) Crank shafts-finished machine (No.) Front axle assembly & comp. (No.)
Source: Company, Angel Research

FY08 194,454 385,431 389,403 79.7 80.9 73.0

FY09 134,650 327,660 222,057 53.0 63.0 41.8

FY10 136,762 316,663 174,302 33.8 61.3 32.9

FY11 203,628 437,039 326,741 49.4 84.3 61.0

FY12E 229,460 388,811 373,520 59.1 75.0 70.0

FY13E 249,207 414,731 373,520 63.0 80.0 70.0

Exhibit 13: Angel vs. consensus forecast


Angel estimates FY12E Net sales (` cr) EPS (`)
Source: Bloomberg , Angel Research

Consensus FY12E 6,146 17.6 FY13E 6,994 21.5

Variation (%) FY12E 2.3 2.0 FY13E 3.6 3.0

FY13E 7,243 22.1

6,287 18.0

Exhibit 14: One-year forward EV/EBITDA band


(`cr) 25,000 20,000 15,000 10,000 5,000 0
Dec-04 Dec-09 May-06 Mar-09 Aug-10 Apr-04 Sep-05 Feb-07 Oct-07 May-11 Jan-12 Jul-08

Exhibit 15: One-year forward EV/EBITDA chart


20x (x) 35 30 25 20 15 10 5 0
Dec-06 Jun-08 Apr-06 Nov-09 Sep-07 Feb-09 Apr-11 Jan-12 Jul-05 Jul-10

EV (`cr)

5x

10x

15x

One-yr forward EV/EBITDA

Three-yr average EV/EBITDA

Source: Company, Bloomberg , Angel Research

Source: Company, Bloomberg , Angel Research

Exhibit 16: Auto Ancillary - Recommendation summary


Company Amara Raja Automotive Axle Bharat Forge* Bosch India# Exide Industries FAG Bearings# Motherson Sumi* Subros
^

Reco. Neutral Neutral Accumulate Neutral Neutral Accumulate Accumulate Accumulate

CMP Tgt. price Upside (`) (`) (%) 250 480 307 7,366 135 1,229 159 26
#

P/E (x) FY12E 11.9 12.6 17.1 21.6 25.5 11.9 17.6 9.1 FY13E 10.5 9.8 13.9 19.6 17.3 10.8 13.3 5.7

EV/EBITDA (x) FY12E 6.8 6.8 8.0 13.3 14.6 6.5 8.5 4.7 FY13E 5.9 5.4 6.6 11.6 10.1 5.4 7.1 3.7

RoE (%) FY12E 24.7 25.7 19.7 21.3 15.6 26.3 20.2 7.4 FY13E 22.9 27.6 20.6 19.5 20.3 22.9 22.7 11.5

FY1113E EPS CAGR (%) 17.3 29.4 33.3 17.2 2.4 24.5 10.0 (0.9)

332 1,359 168 28

8.0 10.6 5.5 6.0

Source: Company, Angel Research; Note: * Consolidated results;

December year end; ^ September year end

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Profit & Loss Statement (Consolidated)


Y/E March (` cr) Gross sales Less: Excise duty Net Sales Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Recurring PBT % chg Extraordinary Items PBT Tax (% of PBT) PAT Less: Minority interest (MI) PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY08 173 FY09 120 FY10 87 FY11 FY12E FY13E 6,481 194 6,287 6,287 25.8 5,281 2,892 1,195 792 402 1,006 46.0 16.0 299 707 62.9 11.2 189 103 16.6 621 42.2 621 189 30.5 431 13 418 418 44.3 6.7 18.0 18.0 44.3 7,467 224 7,243 7,243 15.2 6,081 3,332 1,369 917 464 1,162 15.5 16.0 311 850 20.2 11.7 189 109 14.2 770 24.1 770 239 31.0 531 16 515 515 23.2 7.1 22.1 22.1 23.2 153 4,770 4,831 4,598 4,711 4,598 4,711 10.8 2.5 3,948 4,351 2,129 2,307 849 678 292 650 14.1 227 422 9.2 127 154 450 (1) 450 159 35.2 292 (11) 302 302 6.6 13.6 13.5 872 709 463 360 7.6 252 108 2.3 129 132 110 (8) 118 69 58.7 49 (18) 66 58 1.2 3.0 2.6 3,373 5,152 3,286 4,999 3,286 4,999 (30.3) 52.2 3,081 4,310 1,578 2,337 645 524 334 204 (43.2) 6.2 245 (41) (1.2) 130 106 (65) (17) (48) 12 (24.5) (59) (13) (46) (63) (1.9) (2.1) (2.8) 989 637 347 689 237.2 13.8 255 434 8.7 153 155 35.4 437 (1) 438 140 31.9 298 7 291 290 5.8 12.5 12.5 -

7.5 (44.6)

1.6 (74.5)

34.2 111.5 (222.6) 3.2 (75.4)

3.8 (80.7)

27.1 (80.7)

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Balance Sheet (Consolidated)


Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 3,100 1,323 1,777 584 299 2,478 318 761 1,399 1,623 856 3,516 4,028 1,560 2,468 322 2,532 488 720 1,323 1,208 1,324 4,114 4,135 1,727 2,408 199 274 2,417 598 658 1,162 1,419 998 3,878 4,501 2,038 2,463 307 367 2,764 311 888 1,565 1,807 957 41 4,134 4,818 2,337 2,481 241 447 3,530 569 1,117 1,844 2,269 1,261 41 4,470 5,065 2,648 2,416 253 474 4,323 933 1,265 2,124 2,616 1,707 41 4,891 45 1,610 1,654 70 1,654 137 3,516 45 1,599 1,643 95 2,191 184 4,114 45 1,418 1,463 78 2,253 84 3,878 47 1,906 1,953 154 1,895 132 4,134 47 2,243 2,289 154 1,895 132 4,470 47 2,663 2,710 154 1,895 132 4,891 FY08 FY09 FY10 FY11 FY12E FY13E

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Cash Flow Statement (Consolidated)


Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in loans and advances Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY08 450 227 (207) 104 (154) (159) 261 (658) (92) 154 (596) 10 (135) 91 (252) (286) (621) 939 318 FY09 118 252 (298) 390 (132) (69) 261 (666) 299 132 (236) 2 536 92 (486) 144 170 318 488 FY10 (48) 245 435 28 (106) (12) 542 16 (273) 106 (151) 100 62 26 (470) (282) 109 488 598 FY11 438 255 (246) 189 (155) (140) 341 (475) (93) 155 (412) (267) (358) 27 382 (215) (287) 598 311 FY12E 621 299 (46) (103) (189) 581 (251) (80) 103 (228) 95 (95) 258 311 569 FY13E 770 311 (83) (109) (239) 650 (260) (27) 109 (177) 109 (109) 364 569 933

February 8, 2012

Bharat Forge | 3QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Interest) 0.6 1.6 3.3 1.0 4.7 0.8 0.9 6.8 (0.3) 0.6 1.8 2.8 0.4 0.9 3.7 0.2 0.4 4.5 1.6 53 53 90 34 1.3 59 47 66 34 0.8 80 58 124 53 1.2 54 46 98 69 1.3 53 49 98 38 1.5 55 49 97 39 12.2 13.2 19.2 2.8 3.0 3.5 (1.0) (1.2) (4.1) 10.8 11.4 17.0 16.4 18.1 19.7 18.2 21.5 20.6 9.2 0.6 1.6 9.6 4.8 0.5 12.2 2.3 0.4 1.4 1.3 2.8 0.8 0.1 (1.2) 1.2 1.0 (1.5) 7.3 1.0 (10.2) 8.7 0.7 1.4 8.3 5.0 0.8 10.8 11.2 0.7 1.6 12.7 7.0 0.5 15.6 11.7 0.7 1.8 14.9 6.9 0.3 17.1 13.6 13.5 23.8 3.5 74.3 2.6 2.6 14.3 1.0 73.8 (2.8) (2.8) 8.9 1.0 65.7 12.5 12.5 23.5 3.5 83.9 18.0 18.0 30.8 3.5 98.3 22.1 22.1 35.5 4.0 116.4 22.6 116.6 12.9 4.1 1.3 1.7 12.6 2.3 21.6 4.2 0.4 1.8 24.6 2.2 34.5 4.7 0.4 2.5 41.8 2.2 24.6 13.1 3.7 1.3 1.6 12.2 2.0 17.1 10.0 3.1 1.3 1.2 8.0 1.8 13.9 8.7 2.6 1.5 1.0 6.6 1.6 FY08 FY09 FY10 FY11 FY12E FY13E

February 8, 2012

10

Bharat Forge | 3QFY2012 Result Update

Research Team Tel: 022 - 3935 7800 DISCLAIMER

E-mail: research@angelbroking.com

Website: www. angelbroking.com

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Bharat Forge No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 8, 2012

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