Bharat Forge has been on the uptrend of late after a solid export performance boosted the company's boottom line in Q3.

The scrip of the forging and machined components maker nudged higher by 0.73% on BSE to Rs 228 in mid-morning trades on Friday. The scrip hit a high of Rs 229 and low of Rs 225, earlier. A total of 23,692 BFL shares were exchanged on BSE in a little over an-hour-and-a-half.

The scrip has gained 9.5% to the current level from Rs 208.05 on 10 January 2003 . The recent rally has taken the counter to a near two-year high.

The strong financial performance in the current year has been the driver of the stock. From a low of Rs 50.35 on 8 October 2001, the scrip has zoomed 352% to the current Rs 228. Overall, an aggressive focus on export growth and cost reduction has propelled BFL's financial performance in the current year. The company has replaced some high cost debt with low cost debt and partially replaced rupee term loans with dollar loans.

The company's Q3 results have further boosted the scrip's fortunes. The company has also announced a new order win in the Chinese market.

While sales rose 46% to Rs 180.54 crore in Q3 ended 31 December 2002, PAT jumped 239% to Rs 21.36 crore.

For the quarter ended 31 December 2002, the company recorded export revenues of Rs 74.68 crore, an increase of 154.3% over the corresponding period of the previous year. Sequentially, exports have grown by 4.3%. For the quarter ended 31 December 2002, the company recorded domestic revenues of Rs 105.86 crore (Rs 1.05 billion), an increase of 12.4% over the corresponding period of the previous year.

For the nine months ended 31 December 2002, sales were higher by 39% to Rs 480.29 crore (Rs 4.8 billion) and OPM improved from 22.7% to 28.0%. Thus OP was higher by 71% to Rs 134.71 crore (Rs 1.34 billion). PAT jumped 296% to Rs 51.08 crore.

The company's product portfolio includes automotive engines and suspension components and manufactures a wide range of forging and machined components for automotive, diesel engine, railways, earthmoving, cement, sugar, steel, coal, shipbuilding and oilfield industries. It is now entering small forging and passenger car engine components segment.

BFL secured a second large customer in China. Guangxi Yuchai Machinery Co., a part of the Second Auto Works is amongst the largest auto companies in China. BFL has signed a long-term contract with the company for the supply of engine components. This business will begin ramping up in the second quarter of FY 2003-04.

At the current Rs 228, the scrips discounts its 9-month April-December 2002 annaulised EPS of Rs 18.1 by a PE multiple of 12.5.

BSE Code: 500493