bharat forge, 1q fy 2014

7/27/2019 Bharat Forge, 1Q FY 2014

1/13

Please refer to important disclosures at the end of this report 1

Y/E March - Standalone (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq)Net Sales 792 936 (15.5) 675 17.3EBITDA 196 231 (15.2) 142 38.3

EBITDA margin (%) 24.8 24.7 7bp 21.0 376bp

Adjusted PAT 91 105 (13.9) 50 80.9Source: Company, Angel Research

Standalone performance beats estimates: Bharat Forge (BHFC) reported a strongset of results for 1QFY2014 which are ahead of our estimates. The performancewas driven by sequential improvement in volumes (up 11.2%) led by exportmarkets and better-than-expected EBITDA margins (at 24.8%, up 376bp qoq) on

the back of cost reduction initiatives undertaken in the past two quarters. Thestandalone top-line posted a strong sequential growth of 17.3% to `792cr, aheadof our estimates of `727cr, aided by a strong export revenue growth of 27.6%.The export performance was boosted by a strong growth across all the keygeographies with Europe and the US witnessing an impressive growth of 40% and15.1% qoq respectively. On a yoy basis though, total sales registered a steepdecline of 15.5% yoy due to 19.2% decline in volumes. The EBITDA marginimproved sequentially to 24.8%, vs our expectations of 22.2%, led by cost controlmeasures, favorable forex movement and a better product-mix. Consequently, thenet profit stood at `91cr (up 80.9% qoq), ahead of our expectations of `66cr.

Overseas subsidiaries too recorded an improved performance: The performanceimprovement was also evident at the wholly owned overseas subsidiaries (WoS)

with top-line registering a strong growth of 11% yoy despite a weak environment.The EBITDA margin improved by a strong 170bp yoy to 8.9% on the back ofcontinued focus on productivity improvement and cost control measures.Consequently, the bottom-line surged to `17cr from `8cr in 1QFY2013. TheChina JV however, continued its weak performance due to sluggish automotivedemand, registering a bottom-line loss of `5cr.

Outlook and valuation: While the domestic market performance of the companyremained subdued during the quarter due to dependence on the commercialvehicle industry which continues to remain weak, the Management believes thatthe domestic demand environment has bottomed-out and expects a revival overthe next two-three quarters. Further, the Management expects the export businessto remain strong as export markets continue to see a gradual improvement

leading to improved order inflows from most of the global truck OEMs. At `229,BHFC is trading at 11.7x FY2015E earnings. Due to attractive valuations, werecommend an Accumulate rating on the stock with a target price of `256.Key financials (Consolidated)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENet sales 6,279 5,702 5,942 6,417% chg 23.4 (9.2) 4.2 8.0

Net profit 410 182 364 458% chg 40.7 (55.7) 100.7 25.6

EBITDA (%) 15.9 13.2 15.2 15.5

EPS (`) 17.6 7.8 15.6 19.7P/E (x) 13.0 24.9 14.6 11.7

P/BV (x) 2.4 2.4 2.1 1.9RoE (%) 19.8 8.2 15.4 17.3

RoCE (%) 15.1 8.3 11.2 13.1

EV/Sales (x) 1.0 1.1 1.0 0.9

EV/EBITDA (x) 6.7 8.9 7.1 6.0Source: Company, Angel Research; Note: CMP as of August 14, 2013

ACCUMULATECMP `229

Target Price `256

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code BHFC@IN

Shareholding Pattern (%)

Promoters 42.1

MF / Banks / Indian Fls 31.7

FII / NRIs / OCBs 9.8

Indian Public / Others 16.4

Abs. (%) 3m 1yr 3yr

Sensex (1.8) 9.3 6.6

Bharat Forge (0.1) (24.2) (33.2)

Face Value (`)

BSE Sensex

Nifty

Reuters Code

2.0

19,368

5,742

BFRG.BO

Auto Ancillary

Avg. Daily Volume

Market Cap (`cr)

Beta

52 Week High / Low

5,336

1.0

315/186

48,435

Net Debt (`cr) 1,392

Yaresh Kothari022-3935 7800 Ext: 6844

[email protected]

Bharat ForgePerformance Highlights

1QFY2014 Result Update | Auto Ancillary

August 16, 2013


2/13

Bharat Forge | 1QFY2014 Result Update

August 16, 2013 2

Exhibit 1:Financial performance (Standalone)Y/E March (` cr) 1QFY14 1QFY13 % chg (yoy) 4QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 792 936 (15.5) 675 17.3 3,151 3,686 (14.5)Consumption of RM 325 405 (19.6) 284 14.6 1,357 1,633 (16.9)(% of Sales) 41.1 43.2 42.1 43.1 44.3

Staff Costs 71 69 2.9 61 15.4 257 255 1.0

(% of Sales) 8.9 7.3 9.1 8.2 6.9

Manufacturing expenses 138 172 (19.5) 129 7.7 595 645 (7.7)

(% of Sales) 17.5 18.4 19.1 18.9 17.5

Other Expenses 61 60 2.5 59 3.1 226 237 (4.9)

(% of Sales) 7.7 6.4 8.8 7.2 6.4

Total Expenditure 595 705 (15.5) 533 11.7 2,436 2,771 (12.1)Operating Profit 196 231 (15.2) 142 38.3 716 915 (21.8)OPM (%) 24.8 24.7 21.0 17.9 22.7 24.8

Interest 35 55 (35.3) 33 6.2 153 150 1.9

Depreciation 61 57 8.1 55 12.0 224 215 4.2

Other Income 35 32 11.8 21 72.6 92 68 35.6

PBT (excl. Extr. Items) 135 152 (11.1) 74 81.5 430 617 (30.4)Extr. Income/(Expense) - - - - - (11) 70 -

PBT (incl. Extr. Items) 135 152 (11.1) 74 81.5 440 547 (19.5)(% of Sales) 17.1 16.2 11.0 14.0 14.8

Provision for Taxation 44 47 (4.7) 24 82.6 135 185 (27.1)

(% of PBT) 32.9 30.7 32.7 30.6 33.8

Reported PAT 91 105 (13.9) 50 80.9 306 362 (15.6)Adjusted PAT 91 105 (13.9) 50 80.9 295 432 (31.8)

Adj. PATM 11.4 11.2 7.4 9.4 11.7

Equity capital (cr) 46.6 46.6 46.6 46.6 46.6

Reported EPS (`) 3.9 4.5 (13.9) 2.2 80.9 13.1 15.5 (15.6)Adjusted EPS (`) 3.9 4.5 (13.9) 2.2 80.9 12.7 18.6 (31.8)

Source: Company, Angel Research

Exhibit 2:1QFY2014 Actual vs Angel estimatesY/E March (` cr) Actual Estimates Variation (%)Net Sales 792 727 8.9EBITDA 196 161 21.5EBITDA margin (%) 24.8 22.2 257bp

Adj. PAT 91 66 36.4Source: Company, Angel Research

Standalone top-line driven by exports: For 1QFY2014, standalone revenuesposted a strong sequential growth of 17.3% yoy to `792cr, ahead of our estimates

of `727cr, aided by a strong export revenue growth of 27.6%. The export

performance was boosted by a strong growth across all the key geographies with

Europe and US witnessing an impressive growth of 40% and 15.1% qoq

respectively. While volumes posted a growth of 11.2% qoq, net average realization

registered a growth of 5.1% qoq. On a yoy basis though, total sales registered asteep decline of 15.5% yoy due to 19.2% decline in volumes. On a yoy basis,

domestic and export revenues declined by 10.1% and 20.3% yoy respectively led

by weak automotive demand. Non-auto revenues however, registered a strong


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4/13


August 16, 2013 4

Exhibit 7:EBITDA margin recovers sharply


Exhibit 8:..leading to better-than-expected bottom-line


Exhibit 9:Subsidiary performance1QFY2014 1QFY2013 % chg (yoy) 4QFY2013 % chg (qoq)

WoS China WoS China WoS China WoS China WoS ChinaNet sales 618 174 557 149 11.0 16.8 524 141 17.9 23.4Operating profit 55 2 40 0.1 37.5 - 48 4 14.6 (50.0)

EBITDA (%) 8.9 1.1 7.2 0.1% 9.2 2.8

PBT 26 (9) 12 (12) 116.7 - 20 (5) 30.0 -

PAT 17 (5) 8 (6) 112.5 - NA NA - -Source: Company, Angel Research

Overseas subsidiaries too recorded improved performance: The performanceimprovement was also evident at the WoS with top-line registering a strong growth

of 11% yoy despite a weak environment. The EBITDA margin improved by a strong

170bp yoy to 8.9% on the back of continued focus on productivity improvement

and cost control measures. Consequently, the bottom-line surged to `17cr from

`8cr in 1QFY2013. The China JV however, continued its weak performance due to

sluggish automotive demand, registering a bottom-line loss of `5cr.

24.3 24.0 25.4 25.6 24.7 22.4 21.2 21.024.8

46.4 46.7 44.8 44.4 43.2 44.4 44.0 42.1 41.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.040.0

45.0

50.0

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%) EBITDA margin RM cost/net sales

97

106

103

126

105

92

48

50

91

11.4 11.7 11.0

12.8

11.210.6

7.1 7.4

11.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0

20

40

60

80

100

120

140

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)(`cr) Net profit (LHS) Net prof it margin (RHS)


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August 16, 2013 5

Conference Call Key highlights

According to the Management, the domestic OEM activity is gradually pickingup pace as the inventory correction exercise undertaken by the OEMs has

been completed.

On the exports front, improvement in the US and EU heavy trucks segmentshas been better than companys expectations as the inventory correction cycle

is largely over. The Management therefore expects production levels to largely

reflect customer demand going ahead.

On the non-auto front, exports accounted for ~55% of revenues compared to~45% in 4QFY2013. The outlook for the oil & gas and construction and

mining sectors remains weak as per the Management.

The company is targeting to reduce net debt by`600-`700cr over the next twoyears led by healthy cash flows and minimal capex spends. Additionally, out of

the total ECB outstanding of US$215mn; US$15mn is due for redemption in

FY2014. At the standalone level, the gross debt of the company stood at

~`2,100cr and the cash level at ~`800cr.

The Management does not foresee the need for major capex during FY2014and FY2015 given the lower utilization levels. The Management expects to

incur a capex of `60-`80cr for the India business in FY2014. BHFC intends to

invest ~`170-`200cr in the Alstom JV during FY2014 and FY2015.

The machining-mix for 1QFY2014 was at ~54% vs ~52% in 4QFY2013. Themachining mix in auto and non-auto businesses stood at ~60% and ~35%respectively. The company is aggressively looking at opportunities to increase

machining mix, particularly in the non-auto sector.

The capacity utilization remains at low levels currently. For India, Europe andChina it stood at 6065%, 6567% and less than 50% respectively.

Due to improved efficiencies and cost rationalization, the break-even level forthe domestic operations has been lowered to ~30% levels.

The average realization for 1QFY2014 stood at `57/USD. The company hashedged ~50% of its projected FY2014 exposure at a rate of `58-`59/USD.


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August 16, 2013 6

Investment arguments

Domestic operations dependent on CV demand: BHFC, being a market leaderin the CV space for products such as crankshaft, axle beams and connecting

rods, with an ~90% market share, has been able to register robust growth

over the last two years. However, with slowdown in the domestic commercial

vehicle segment, we expect the companys domestic operations to post a

slightly subdued growth in FY2014.

Turnaround of the overseas subsidiaries and JVs a key to boost consolidatedperformance: BHFCs international operations posted losses (pre-tax) inFY2010 due to a decline in demand and high operational costs. However,

restructuring exercise and operational efficiencies led to a strong turnaround

in the Chinese JV (FAW-BF) and other subsidiaries in FY2012. Nonetheless,

the subsidiaries are again posting losses as there has been a demandslowdown in China, US and Europe. We believe that revival in demand is the

key for the overseas subsidiaries as it will boost the capacity utilization levels,

which in turn would lead to higher profitability.

Thrust on non-auto business to diversify product portfolio: BHFC intends toincrease its non-automotive revenue to 40% (~35% of consolidated revenue in

FY2012). To achieve this goal, BHFC has set up an 80MT hammer (40,000

TPA capacity) and a ring rolling (25,000 TPA capacity) facility in Baramati in

addition to the existing 60,000 TPA non-auto facility in Mundhwa. We expect

BHFC to benefit from new investments by various players in the power, oil and

gas and capital goods sectors, leading to a strong demand for non-automotive forgings.

Outlook and valuation

While the domestic market performance of the company remained subdued during

the quarter due to dependence on the commercial vehicle industry which continues

to remain weak; the Management believes that the domestic demand environment

has bottomed-out and expects a revival over the next two-three quarters. Further,

the Management expects the export business to remain strong as export markets

continue to see a gradual improvement leading to improved order inflows from

most of the global truck OEMs. We revise our consolidated revenue estimates forFY2014E/15E downwards by 4.1%/5.5% primarily to account for the weakness in

the domestic markets. However, our EBITDA margin estimates for FY2014E/15E

are revised upwards by ~100bp each to factor in the strong performance during

the quarter and steps taken to improve productivity and control costs, and also due

to the expected benefits on account of INR depreciation against the USD.

Consequently, our earnings estimates are revised upwards by 7.6%/13.6% for

FY2014E/15E.


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August 16, 2013 7

Exhibit 10:Change in estimatesY/E March (` cr) Earlier Estimates Revised Estimates % chg

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet sales 6,198 6,793 5,942 6,417 (4.1) (5.5)OPM (%) 14.2 14.6 15.2 15.5 100bp 90bp

EPS (`) 14.5 17.3 15.6 19.7 7.6 13.6Source: Company, Angel Research

At `229, BHFC is trading attractively at 11.7x FY2015E earnings. We recommendan Accumulate rating on the stock with a target price of `256, valuing the stock at13x FY20145 earnings.Exhibit 11:Angel vs consensus forecast

Angel estimates Consensus Variation (%)FY14E FY15E FY14E FY15E FY14E FY15E

Total op. income (` cr) 5,942 6,417 6,124 6,896 (3.0) (6.9)EPS (`) 15.6 19.7 14.4 19.4 8.6 1.5


Exhibit 12:One-year forward EV/EBITDA band


Exhibit 13:One-year forward EV/EBITDA chart


Exhibit 14:Auto Ancillary Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)Amara Raja Batteries Accumulate 277 305 10.0 14.6 13.2 8.9 7.4 27.1 24.1 10.2

Automotive Axle^ Neutral 209 - - 12.1 7.7 4.8 3.6 9.5 14.0 (4.7)

Bharat Forge* Accumulate 229 256 11.5 14.6 11.7 7.1 6.0 15.4 17.3 58.8Bosch India# Accumulate 8,517 9,096 6.8 25.1 20.1 15.0 11.7 16.6 17.6 23.3

Exide Industries Accumulate 133 148 11.9 16.7 14.7 9.0 7.6 18.3 18.0 21.1

FAG Bearings# Neutral 1,157 - - 15.3 11.3 8.7 6.1 13.4 15.8 3.4

Motherson Sumi* Neutral 236 - - 18.2 14.7 7.2 6.1 29.4 28.6 24.9

Subros Accumulate 20 23 12.1 8.7 5.4 3.3 2.9 4.8 7.6 5.6

Source: Company, Angel Research; Note: *Consolidated

0

5,000

10,000

15,000

20,000

25,000

Apr-04

Jan-0

5

Oct-05

Aug-0

6

May-0

7

Feb-0

8

Dec-0

8

Sep-0

9

Jun-1

0

Apr-11

Jan-1

2

Oct-12

Aug-1

3

(` cr) EV (`cr) 5x 10x 15x 20x

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Jul-05

Apr-06

Jan-0

7

Oct-07

Jun-0

8

Mar-09

Dec-0

9

Sep-1

0

Jun-1

1

Feb-1

2

Nov-1

2

Aug-1

3

(x) One-yr forward EV/EBITDA Five-yr average EV/EBITDA


8/13


August 16, 2013 8

Company background

Bharat Forge, a global forging conglomerate, is the largest exporter of automotive

components from India and a leading chassis component manufacturer in the

world. The company manufactures a wide range of safety and critical components

for passenger cars, SUVs, LCVs, MHCVs and tractors through its facilities spread

across 10 locations globally - India (4), Germany (3), China (2), and Sweden (1).

BHFC also produces forged and machined components for non-automotive

industries, such as power generation, marine, oil and gas, railways and

construction. The automotive industry currently contributes ~75% to

the company's consolidated revenue; although through diversification BHFC

expects the share of the automotive industry's revenue to fall to 55%.


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August 16, 2013 9

Profit and loss statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ETotal operating income 3,286 5,087 6,279 5,702 5,942 6,417% chg (30.3) 54.8 23.4 (9.2) 4.2 8.0Total expenditure 3,081 4,309 5,283 4,950 5,039 5,423Net raw material costs 1,578 2,427 2,913 2,531 2,573 2,779

Other mfg costs 645 911 1,179 1,188 1,212 1,309

Employee expenses 524 646 780 801 832 898

Other 334 325 410 430 422 436

EBITDA 204 777 996 753 903 995% chg (43.2) 280.4 28.2 (24.5) 20.0 10.1

(% of total op. income) 6.2 15.3 15.9 13.2 15.2 15.5

Depreciation & amortization 245 255 302 336 356 370

EBIT (41) 522 694 417 547 625% chg - - 32.9 (40.0) 31.3 14.2

(% of total op. income) (1.2) 10.3 11.1 7.3 9.2 9.7

Interest and other charges 130 153 186 191 183 153

Other income 89 66 95 149 71 74

Recurring PBT (82) 435 603 375 435 546% chg - - 38.6 (37.8) 15.9 25.6

Extraordinary items (17) (1) 3 33 0 0

PBT (reported) (65) 437 600 342 435 546Tax 12 140 180 173 137 172

(% of PBT) (18.0) 32.0 29.9 50.5 31.5 31.5

Minority interest (MI) (13) 7 7 (45) (67) (84)

PAT (reported) (63) 290 413 214 364 458ADJ. PAT (46) 292 410 182 364 458% chg - - 40.7 (55.7) 100.7 25.6

(% of total op. income) (1.4) 5.7 6.5 3.2 6.1 7.1

Basic EPS (`) (2.8) 12.5 17.8 9.2 15.6 19.7Adj. EPS (`) (2.1) 12.5 17.6 7.8 15.6 19.7% chg (170.4) (701.1) 40.7 (55.7) 100.7 25.6


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August 16, 2013 10

Balance sheet statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity share capital 45 47 47 47 47 47Reserves & surplus 1,418 1,906 2,137 2,210 2,441 2,766

Shareholders funds 1,463 1,953 2,184 2,256 2,487 2,812Minority interest 78 154 196 164 164 164

Total loans 2,253 1,886 2,419 2,333 1,833 1,533

Deferred tax liability 84 132 89 135 135 135

Other long term liabilities 1 22 38 38 38

Long term provisions 80 88 107 107 107

Total Liabilities 3,878 4,207 4,997 5,033 4,764 4,789APPLICATION OF FUNDSGross block 4,135 4,501 5,022 5,647 5,936 6,163

Less: Acc. depreciation 1,727 2,038 2,370 2,737 3,094 3,463

Net Block 2,408 2,463 2,653 2,910 2,842 2,700Capital work-in-progress 199 201 517 632 594 616

Investments 274 261 445 416 394 396Long term loans and advances 325 392 253 253 253

Other noncurrent assets 37 51 37 37 37

Current assets 2,417 2,388 3,277 3,190 3,197 3,532Cash 598 396 634 555 350 486

Loans & advances 658 426 733 892 936 983

Other 1,162 1,565 1,909 1,743 1,911 2,064

Current liabilities 1,419 1,468 2,337 2,407 2,553 2,746

Net current assets 998 920 939 784 643 786Total Assets 3,878 4,207 4,997 5,033 4,764 4,789

Note: Cash includes term deposits with banks with maturity of more than 3 months but less than 12

months


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August 16, 2013 11

Cash flow statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EProfit before tax (65) 437 600 342 435 546

Depreciation 245 255 302 336 356 370Change in working capital 435 (123) 218 77 (170) 36

Others 28 (22) (159) 324

Other income (89) (66) (95) (149) (71) (74)

Direct taxes paid (12) (140) (180) (173) (137) (172)

Cash Flow from Operations 542 341 686 758 413 706(Inc.)/Dec. in fixed assets 16 (368) (837) (740) (250) (250)

(Inc.)/Dec. in investments (273) 12 (184) 29 22 (2)

Other income 89 66 95 149 71 74

Cash Flow from Investing (168) (290) (926) (562) (157) (178)Issue of equity 100 (267) 67 89 - -

Inc./(Dec.) in loans 62 (366) 859 (86) (500) (300)

Dividend paid (Incl. Tax) 26 27 95 108 92 92

Others (453) 354 (544) (263)

Cash Flow from Financing (265) (252) 477 (151) (592) (392)Inc./(Dec.) in cash 109 (201) 237 44 (336) 136

Opening Cash balances 488 598 396 511 686 350Closing Cash balances 598 396 634 555 350 486Closing cash balance excludes term deposits with banks with maturity of more than 3 months but

less than 12 months


12/13


August 16, 2013 12

Key ratios

Y/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) - 18.3 13.0 24.9 14.6 11.7P/CEPS 25.7 9.8 7.5 9.7 7.4 6.4

P/BV 3.5 2.7 2.4 2.4 2.1 1.9

Dividend yield (%) 0.5 1.5 1.7 1.5 1.5 1.5

EV/Sales 2.0 1.3 1.0 1.1 1.0 0.9

EV/EBITDA 32.9 8.4 6.7 8.9 7.1 6.0

EV / Total Assets 1.7 1.6 1.3 1.3 1.3 1.3

Per Share Data (`)EPS (Basic) (2.8) 12.5 17.6 9.2 15.7 19.7

EPS (fully diluted) (2.1) 12.5 17.6 7.8 15.6 19.7

Cash EPS 8.9 23.5 30.6 23.6 30.9 35.5

DPS 1.0 3.5 4.0 3.4 3.4 3.4

Book Value 65.7 83.9 93.8 96.9 106.8 120.8

Dupont AnalysisEBIT margin (1.2) 10.3 11.1 7.3 9.2 9.7

Tax retention ratio 1.2 0.7 0.7 0.5 0.7 0.7

Asset turnover (x) 1.0 1.4 1.5 1.3 1.3 1.5

ROIC (Post-tax) (1.4) 10.0 11.9 4.7 8.4 9.8

Cost of Debt (Post Tax) 6.9 5.0 6.1 4.0 6.0 6.2

Leverage (x) 1.0 0.8 0.6 0.6 0.5 0.3

Operating ROE (9.6) 13.8 15.5 5.1 9.7 11.0

Returns (%)ROCE (Pre-tax) (1.0) 12.9 15.1 8.3 11.2 13.1

Angel ROIC (Pre-tax) (1.2) 13.7 15.9 9.3 12.4 14.5

ROE (3.0) 17.1 19.8 8.2 15.4 17.3

Turnover ratios (x)Asset Turnover (Gross Block) 0.8 1.2 1.3 1.1 1.0 1.1

Inventory / Sales (days) 80 53 55 71 71 69

Receivables (days) 58 45 46 46 46 46

Payables (days) 124 95 126 147 146 146

WC cycle (ex-cash) (days) 69 33 24 17 16 17

Solvency ratios (x)Net debt to equity 0.9 0.6 0.6 0.6 0.4 0.2

Net debt to EBITDA 6.8 1.6 1.3 1.8 1.2 0.7

Interest Coverage (EBIT / Int.) (0.3) 3.4 3.7 2.2 3.0 4.1


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A 16 2013 13

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment bankingor other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or

in the past.

Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from

or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Bharat Forge

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors

bharat forge, 1q fy 2014

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