Incorporated in 1961, Bharat Forge Ltd is the flagship company of the Pune-based Kalyani Group, which has interest in forging, auto components, specialty steels, infrastructure, renewable energy and specialty chemicals business.
BFL is the largest forging company in the world. The company operates in two main segments — manufacturing of automotive and non-automotive components.
BFL’s Q2FY16 PAT at Rs.185 crore (+1 per cent y-o-y, -9 per cent q-o-q) missed consensus estimates on muted topline performance and lower-than-expected operating margins.
BFL remains confident of achieving its standalone revenue guidance of Rs.7,000 crore by FY18 led by ramp-up in segments such as aerospace, railways and passenger vehicles.
Near- to medium-term demand challenges notwithstanding, we remain positive on BFL’s growth prospects on the back of
- Sizable opportunity in industrial forgings and BFL’s modest market share;
- Capability to develop new products;
- Strong balance sheet position.
The recent stock price correction provides an attractive entry point to investors.
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