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Bharat Forge casts a bright glow
February 18, 2003 14:37 IST
Bharat Forge spurted to its two-year high of Rs 261.95 on Tuesday after the company has been forging ahead from strength to strength in financial perfermance as well as stock indices recently.
An earlier high was achieved on 9 February 2002 (intra-day) of Rs 270. By early afternoon trades, though, the scrip of the forgings major was up 2.8% to Rs 259.50.
A strong financial performance this year and recent new export order wins have compelled the growth. The scrip has risen by a staggering 415% to the current Rs 261.95 from a low of Rs 50.35 on 8 October 2001.
The stock has been on a firm drive on the bourses on the back of a massive cost reduction exercise including bringing down debt and an export thrust to include new products and new markets. The improvement in the domestic auto market, with the commercial vehicles and utility vehicles segments picking up, has helped the company's fortunes . But the driving force has been exports, where prices and payment terms are also significantly better than those in the domestic market.
The company's financial performance for Q3 has been robust. While sales rose 46% to Rs 180.54 crore (Rs 1.8 billion) in Q3 ended 31 December 2002, PAT jumped 239% to Rs 21.36 crore. For the quarter ended 31 December 2002, the company recorded export revenues of Rs 74.68 crore, an increase of 154.3% over the corresponding period of the previous year. Sequentially, exports have grown by 4.3%. For the quarter ended 31 December 2002, the company recorded domestic revenues of Rs 105.86 crore (Rs 1.05 billion), an increase of 12.4% over the corresponding period of the previous year.
For the nine months ended 31 December 2002, sales were higher by 39% to Rs 480.29 crore and OPM improved from 22.7% to 28.0%. Thus OP was higher by 71% to Rs 134.71 crore. PAT jumped 296% to Rs 51.08 crore.
A few months back, BFL secured a second large customer in China. Guangxi Yuchai Machinery Co., a part of the Second Auto Works, is among the largest auto companies in China. BFL has signed a long-term contract with the company for the supply of engine components. This business will begin ramping up in the second quarter of FY 2003-04.
BFL boasts the world's largest forging facility - 102,000 tonnes - at a single location.
At the current Rs 259.50, the scrip discounts its 9-month April-December 2002 annualised EPS of Rs 18.1 by a PE multiple of 14.3.
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