“Investing in Bharat Forge Limited: The Smart Move for Long-Term Investors”
Table of Contents
- Founded: 1961
- Headquarters: Pune
- Industries: Castings & Forgings
- listed in Exchange: NSE(BHARATFORG), BSE(500493)
- website: www.bharatforge.com
- Market capitalization: 35,63,149.80 Lakhs
Investing in the stock market is a great way to grow your wealth over the long term. However, with so many options available, it can be overwhelming to choose which company to invest in. In this blog post, we will discuss why investing in Bharat Forge Limited is a smart move for long-term investors.
Bharat Forge Limited is a leading Indian multinational company that specializes in the automotive, power, oil and gas, construction, and mining industries. It has grown to become a well-established company with a strong reputation. The company has consistently demonstrated steady growth over the years, and its stock price has performed well in the market.
With its own engineering prowess, Bharat Forge is well-positioned in the global environment. Its integrated, technology-driven operations enable world-class manufacturing and R&D skills, and we are always conceptualizing solutions for the future.
The key fields of renewable energy, electric mobility, lightweight, defense, and aerospace have all been added to Bharat Forge’s scope. With greater use of renewable energy in operations and gradually lessening the use of natural resources in all facilities across India, they are also becoming greener.
Bharat Forge Manufacturing unit:
Bharat Forge is an international engineering company with dominant positions in the key markets of India, North America, and Europe. Through local presence, we offer support and value-added services to customers.
They currently operate 15 manufacturing locations in 5 different countries, all of which collaborate to best meet client needs. They also consistently make investments in innovation and modernization to maintain their competitive edge.
- Total capacity: 736,718 TPA
- In India:
- Bharat Forge:
- Steel Forging Capacity: 403,750 MTPA
- Aluminum Casting Capacity: 2,400 MTPA
- Sanghvi Forging and Engineering
- Steel Forging Capacity: 20,000 MTPA
- JS Auto Cast:
- Iron Casting Capacity: 50,568 MTPA
- Bharat Forge:
- In North American
- Steel Forging Capacity: 30,000 MTPA
- Aluminum Forging Capacity: 10,000 MTPA
- In Europe
- Steel Forging Capacity: 190,000 MTPA
- Aluminum Forging Capacity: 30,000 MTPA
Financial Performance and Growth Potential
BFL has shown consistent financial performance over the years, with a strong balance sheet and profitability ratios. The company’s revenue and net profit have grown at a compound annual growth rate (CAGR) of 11% and 22% respectively over the past five years. BFL’s growth potential is driven by its expansion in new markets, product diversification, and strategic acquisitions.
Competitive Advantage
BFL has a strong competitive advantage over its peers in the industry, primarily due to its advanced manufacturing capabilities and technological innovations. The company has invested heavily in research and development, resulting in a strong intellectual property portfolio. BFL’s customers benefit from its cost-efficient production processes and timely delivery, which gives the company a competitive edge.
Industry Trends and Growth Prospects
The global automotive and industrial sectors are experiencing growth due to increased demand from emerging markets and technological advancements. BFL is well-positioned to benefit from these trends due to its diversified product portfolio. The company’s strategic focus on innovation, coupled with its strong customer relationships, enables it to adapt quickly to changing market conditions and stay ahead of the competition.
Bharat Forge Shareholders pattern:
- Promoters: 45.25%
- Mutual Funds: 17.64%
- FPI: 19.80%
- Others: 17.31%
Bharat Forge Subsidiaries :
- Bharat Forge Global Holding GmbH and its wholly-owned subsidiaries
- Bharat Forge Daun GmbH
ii. Bharat Forge Holding GmbH and its wholly-owned subsidiary - Bharat Forge Aluminiumtechnik GmbH
iii. Mecanique Generale Langroise * France
iv. Bharat Forge Kilsta AB * Sweden - Bharat Forge International Limited U.K.
- Bharat Forge America Inc. and its wholly owned subsidiaries
i. Bharat Forge PMT Technologie LLC * U.S.A.
ii. Bharat Forge Tennessee INC. * U.S.A.
iii. Bharat Forge Aluminium USA, INC. * U.S.A. - Indigenous IL Limited
- BF Infrastructure Limited and its subsidiaries in India
i. BFIL-CEC JV India
ii Ferrovia Transrail Solutions Private Limited - Kalyani Strategic Systems Limited and its subsidiaries in India
i. Kalyani Rafael Advanced Systems Private Limited India
ii. Kalyani Strategic Systems Australia Pty Limited
iii. Sagar Manas Technologies Limited - BF Elbit Advanced Systems Private Limited India
- Eternus Performance Materials Private Limited India
- Kalyani Centre for Precision Technology Limited India
- Kalyani Powertrain Limited (KPL) and its subsidiaries in India
i. Kalyani Mobility INC
ii. Tork Motors Private Limited and its wholly-owned subsidiary India - Lycan Electric Private Limited India
iii. Electroforge Limited - BF Industrial Solutions Limited
- BF Industrial Technology and Solutions Limited
i. Sanghvi Europe B.V. Netherlands - JS Auto Cast Foundry India Private Limited
- Kalyani Lightweighting Technology Solutions Limited
Bharat Forges Financial Information:
| Particulars | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Revenue from operation | 53,160 | 65,200 | 45,639 | 36,515 | 104,610.78 | 129,102.59 |
| Profit Before Tax | 13,029 | 15,931 | 7,109 | 4,312 | 13,282 | 13,827.47 |
| Profit after tax | 7,073 | 10,713 | 4,735 | 3,121 | 10,778 | 10,454.74 |
Quarterly results:
| Particulars | Dec 2020 | March 2021 | Jun 2021 | Sep 2021 | Dec 2021 | March 2022 | Jun 2022 | Sep 2022 | Dec 2022 | March 2023 |
| Revenue from Operation | 17,611.12 | 21,352.28 | 21,483.93 | 24,238.95 | 24,286.41 | 35,730.93 | 28,514.64 | 31,222.72 | 33,899.50 | 36,868.51 |
| Profit before tax | (1,759.51) | 2,692.65 | 2,033.98 | 3,405.57 | 4,999.52 | 3,366.07 | 2,345.83 | 2,347.79 | 1,808.08 | 1,767.75 |
| Profit after tax | (2,104.48) | 2,121.23 | 1,527.48 | 2,704.54 | 4,220.01 | 2,318.58 | 1,603.70 | 1,415.56 | 787.19 | 1,277.42 |
Bharat Forge Ratio:
| Particulars | 2023 |
| Operating Margin | 13.43% |
| Net Profit Margin | 3.94% |
| Interest Service Coverage Ratio | 5.80 |
| Debt Service Coverage Ratio | 1.86 |
| Debtors Turnover Ratio | 4.90 |
| Inventory Turnover | 2.04 |
| Debt Equity Ratio | 1.02 |
| Current Ratio | 1.09 |
| Current Liability Ratio | 0.71 |
| Net Worth | 64,494.52 |
Conclusion
Investing in Bharat Forge Limited offers long-term investors an opportunity to capitalize on a company with a rich history, strong fundamentals, global reach, and a diversified revenue stream. The company’s strategic positioning, commitment to technological innovation, and exposure to India’s infrastructure growth story further enhance its investment appeal.
As with any investment, it is essential to conduct thorough research, analyze the company’s financials, and consider your risk tolerance and investment objectives before making a decision. However, for those seeking a reliable investment option with promising long-term prospects, Bharat Forge Limited emerges as a smart move.
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