December 14, 2015

Buy rating on Bharat Forge

Bharat Forge organised a meeting with analysts to discuss the company’s business plans. We were impressed by the efforts it has made to scale-up various segments of its business and develop new products to double its standalone revenues over the next five years. FY2016 is likely to be a weak year for the company, led by slowdown in the US truck market and oil & gas industry (~40% of standalone revenues) but new products/verticals will likely result in 16% CAGR (compound annual growth rate) in revenues in the FY2016-18 period. We maintain BUY with a revised target price of R965 (R975 earlier).


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