Latest at dstreetdirect- BHARAT FORGE Report by Religare

Excerpts from http://www.dstreetdirect.com/stock-discussion-market-buzz/2037-bharat-forge-report-religare.html
Posted By : ravisvk

Religare Securities believes Bharat Forge valuations are attractive at current levels and has maintained a ‘Buy’ call on the stock with a target price of Rs 404 on a price to earning of 22.5x on FY09 estimate. This makes for an upside of 25 per cent to the current price of Rs 322.

Bharat Forge is currently trading at P/E of 17.9 times and EV/EBIDTA of 8.8 times 2008-09 estimate. The brokerage also valued the company on DCF, which yields a fair value of Rs 406 based on weighted average cost of capital of 13 per cent, beta of 1 per cent and terminal growth of 3 per cent.

The company will be incurring capital expenditure of Rs 330 crore during the current year and in 2008-09 to set up greenfield capacities for non-automotive foray at Pune, Mundwa and Baramati. Construction has already started and is expected to begin trial production in the first and second quarter of 2008-09 (April-March). It expects contribution from the non-automotive business to increase the consolidated revenue from 10 per cent to 17 per cent by end of 2009-10.

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