Bharat Forge
Entry Price: Rs 275
Market price: Rs 263.60
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Bharat Forge delivered a strong export growth in the quarter ended
June 2007 at about 32 per cent y-o-y despite the rising rupee.
Further, even though the domestic commercial vehicle industry, which
is the key growth driver for Bharat Forge-- remained subdued during
the quarter, the company's domestic revenue grew 9 per cent y-o-y.
Exports to European Union markets almost doubled to Rs 93.3 crore
compared to Rs 46.9 crore in the corresponding quarter previous year.
On the other hand, US exports grew by 4.3 per cent y-o-y to Rs 122.3
crore, and Asia Pacific market witnessed growth of 37 per cent y-o-y
to Rs 8.1 crore. Following a slowdown in the US business, the
management expects a recovery in early 2008.
Going forward, Bharat Forge also expects a revival in its Chinese
operations with further inventory corrections. The stock currently
trades at 17 times and 12 times estimated FY08 and FY09 earnings
respectively.
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