Bharat Forge Q3FY18: Net Profit jumps 77.40%; Overweight

Firstcall India Equity | Feb. 12, 2018, 4:25 p.m.

Outlook and Valuation

At the current market price of Rs. 761.90, the stock P/E ratio is at 40.57x F Y18E and 35.11 x F Y19E respectively.

Earning per share (EPS) of the company for the earnings for FY18E and FY19E are seen at Rs. 18.78 and Rs. 21.70 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 31% over 2016 to 2019E, respectively.

On the basis of EV/EBITDA, the stock trades at 20.96 x for F Y18E and 18.51 x for F Y19E.

Price to Book Value of the stock is expected to be at 7.04 x and 5.87 x for F Y18E and F Y19E respectively.

As the company looks ahead in to Q4 FY 18, expects to see continuation of strong underlying macros supporting demand improvement across geographies and businesses. Demand in Q4 is expected to be stronger compared to Q3 driven by continued growth in domestic CV cycle. Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

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