Flash News Investment - - RECOMMENDATIONS -

Bharat Forge is in­volved in steel forg­ings, fin­ished ma­chined crankshafts, and front axles assem­bly and com­po­nents. The com­pany re­ported strong set of num­bers in Q2 of FY19. Its rev­enue for the quar­ter surged al­most 34 per cent yoy to Rs. 1679.2 crore. EBITDA for Q2FY19 stood at Rs. 475.4 crore, up by al­most 29 per cent from Q2FY18. Also, the net profit for the pe­riod jumped al­most 32 per cent yoy to Rs. 268.5 crore. New prod­uct launches in alu­minium forg­ing seg­ment are likely to aid rev­enue growth as forg­ing for car chas­sis has ro­bust prospects due to BS-6. The com­pany’s man­age­ment ex­pects ex­ist­ing prod­uct and tech­nol­ogy to clock or­ganic growth of 10‐12 per cent. Be­sides, its new forg­ing and ma­chin­ing fa­cil­ity is likely to com­mence op­er­a­tion dur­ing first half of FY20. Thus, we rec­om­mend a BUY on this scrip.

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