Higher revenue visibility to drive Bharat Forge's prospects

Growth recovery in key businesses will boost revenues and margins

The Bharat Forge stock has been hitting its 52-week highs on expectations of stronger growth in FY18 and FY19, led by both the auto and industrial segments. Recent quarterly results, including that of the September quarter (Q2), have increased investor confidence. Most brokerages have increased their earnings estimates as well as target prices given the recovery in key segments.

While there are multiple triggers, the company’s Q2 results have been the most recent. Led by a better product mix, especially industrial exports, the company reported better-than-expected performance especially at the operating profit level. Better product mix and improving leverage saw