Bharat Forge Ltd (532760) closes at ₹751.10 with a Gain
of +7.90%% on 04-June-2021
with formation of a Long Red
Candle on Daily Price Chart.
About the Company : Bharat
Forge is engaged in the manufacturing and selling of forged and machined
Compoundant for auto and industry sector.
Strength : 1.the US government’s $6 trillion
budget with focus in multiple areas including transportation is expected to
boost demand for commercial vehicles (CV).
2.Profitability of its international
subsidiaries have also improved from 5 per cent three years ago to double
digits (10 per cent) now.
3.The company has acquired Sanghvi Forgings
which will help it tap growth opportunities in the infrastructure and renewal
energy space.
4.The strong class 8 commercial vehicle
& Industrial segment (oil and gas space with demand coming back on rising
crude oil prices )is doing well.
Financials : Bharat Forge Ltd has posted Net Sales /
Revenue of ₹6336.30 Cr & Net Loss of - ₹126.40 Cr in FY2021 and expected to
post Net Sales / Revenue of ₹8481.30 Cr & Net Profit
of ₹809.30 Cr in FY2022 & Net
Sales / Revenue of ₹10034.70 Cr & Net Profit
of ₹1140.20 Cr in FY2023.
EPS will be improved from -2.70 in FY2021 to 24.0 in FY2023, RoE from
3.44% to 18.50%, RoA from 1% to 9.02% along with reduction of debt from ₹1808.50Cr to ₹1211.00 with
increase in Free Cash Flow from ₹536.90 Cr to ₹981.40 during the
same period.
Valuations : The Company is now Trading at X 2.59 of its valuations
of its FY2022 earnings with ~159% Premium and X1.84 of its FY2023 earnings with
~84% premium ( We have not valued the company for FY2021 since it has posted
Net Loss)
Margin of Safety (1Yr Bond Yield: Value>1 ) is now 0(Zero)
which makes is attractive .. The Equity Value Per Share ( Enterprise Value Method
) is ₹740.70.
If We factor its FY2023 earnings/valuations, its Price
arrives at ₹1056
Disclaimer : We are / may going to take exposure shortly.
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Data
Source | NSE Website | Screener.In | Capital
Line | Money
Control |
The
author tracks economic, behavioural and corporate tends, hoping to gauge good
avenues of return based on Fundamental Valuations of Stocks, a follower of EPV
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