Geojit's research report on Bharat Forge
Q3FY21 revenue declined by 6%YoY due to tepid market demand from the Oil & Gas sector. However, faster revival in both US & Europe truck market and strong rebound in domestic market offset further decline. Margin expanded to pre-covid levels at 16.1% owing to continuous restructuring and cost control measure. The Union budget’s focus on Infrastructure development along with vehicle scrappage policy bodes well, for both commercial vehicle and industrial sector growth in the medium term. Government’s initiative to enhance local manufacturing through the announcement of Production linked schemes (PLI) & mission of Atma Nirbharata in defense, has started opening new orders for BFL.
Outlook
Amid crisis, the demand visibility looks attractive on a medium basis for BFL, owing to the growth coming from the CV industry and defence sector and thus reiterate our Buy rating.
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