BHARAT FORGE

BUSINESS OVERVIEW

Bharat Forge Limited (BFL), is a leading global ‘Full Service Supplier’ of forged and machined -
Powertrain & Chassis components. The Company is India’s largest exporter of auto
components. Bharat Forge manufactures a wide range of high performance, highly engineered
critical and safety components for automotive and industrial applications. With a customer
base that includes top-5 global commercial vehicle and passenger vehicle manufacturers, and
virtually every global OEM and Tier I supplier in the automotive space and a wide range of
marquee customers in the industrial sector, BFL today is among the few global component
manufacturers with capability to offer front line design and engineering, dual shore
manufacturing capability, and full-service supply capability.

BFL's "bread and butter" products:

 front axle beams ---- Needed in EVs

 steering knuckles ---- Needed in EVs

 connecting rods ---- Not Needed in EVs

 Crankshafts ---- Not Needed in EVs
POSITIVE IMPACT OF EV/ OPPORTUNITY

Being India’s largest exporter of OEM’s, Bharat Forge has developed an Asset light, low risk and
a geographically diverse business model with manufacturing locations spreading to USA,
France, Sweden and Germany also. Given that the European countries are much developed and
with their increased penetration in the Electronic Vehicle market, Bharat Forge Ltd. stands at a
competitive advantage as they can take inputs from those countries and apply it effectively to
their production methods to cope up with the Electronic vehicle Era.

Also, their main 2 products, i.e. front axle beams and steering knuckles will have an increased
demand with an increase in EVs. With the rapid growth of two axle trucks, they have already
laid a good foundation for the increased demand and opportunity.
NEGATIVE IMPACT OF EV

The 2 major products of the company, i.e. crankshafts and connecting rods will not be used in the
electronic vehicles. Hence, the company can face a significant reduction in demand as well as turnovers.

Also, the company’s current product portfolio is primarily designed according to the automobile industry
running on fossil fuels. Therefore, if the company wishes to continue with the same revenue growth in
the EV era, a major shuffling of the entire Business system must be implemented.

Ratio Analysis (%)

(YE March 31st) FY 13 FY 14 FY 15 FY 16 FY 17
Fixed Assets Turnover Ratio
EBITDA Margin
Net Profit Margin
Average Return on Equity
Average ROCE
Inventory turnover
Payable
Receivables(days)
Net Debt to Equity (%)
(YE March 31st) FY 13 FY 14 FY 15 FY 16 FY 17
Dil. No.of Shares (mn)
Diluted EPS (Rs)
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Sales (x)
Dividend Yield (%)

Face Value (INR)

CMP (INR)
BV (INR)
EV (INR mn)