26 December 2017
A
nnual
R
eport
T
hreadbare
Bharat Forge’s (BHFC) FY17 annual report analysis highlights rising
capital intensity and a weak operating performance, which led to a
muted RoCE of 9.6% (FY16: 10.5%).
RoE (adjusted for exceptional
gain) stood at 15% (FY16: 19%), aided by a high equity multiplier
ratio. Consolidated revenue declined 6% to INR66.0b, while the
EBITDA margin shrunk 115bp to 19% due to rising personnel cost.
The cash conversion cycle deteriorated to 107 days (FY16: 94 days),
leading to low OCF of INR10.5b in FY17 (FY16: INR13.6b). Capex
remained high (but declined YoY) at INR6.6b (FY16: INR9.0b), which
led to FCF of INR2.9b (FY16:INR3.4b). Purchases from related party
transactions stood at 28% (FY16: 53%) of raw material cost. Cash
and investments stood at INR15.3b (37% of NW), with a yield of
5.1%. Borrowing cost declined to 3.2% (FY16: 3.4%), aided by the
replacement of high interest debentures with cheaper foreign
currency borrowings.
BHARAT FORGE FY17
The
ART
of annual report analysis
Rising capital intensity and
subdued operating
performance led to muted
RoCE of 9.6% (FY16:
10.5%).
OCF declines to INR10.5b (FY16: INR13.6b)
as cash conversion cycle increases to 107
days (FY16: 94 days).
Purchases from related party stood at 28%
(FY16: 53%) of raw material cost.
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel. Perf. (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
BHFC IN
465.7
1220/717
-8/3/27
339.6
5.3
931
54.3
Sep-17
45.7
12.6
20.6
21.1
Jun-17
45.7
15.7
19.8
18.8
Sep-16
46.7
25.8
7.8
19.6
Weak operating performance continues:
BHFC’s consolidated
revenue declined 6% to INR66b (FY16: INR70b) owing to the
sluggish US class 8 truck market and commodity-related sectors,
while the EBITDA margin shrunk 115bp to 19%. PBT stood muted
at INR9.5b (FY16: INR9.7b). Subsidiaries continued with its
minimal contribution to profitability, with PBT (before
exceptional gain) of INR0.1b, as against pre-tax loss of INR0.6b in
FY16. This has dragged the standalone RoCE (at 11.8%) to lower
consolidated RoCE (at 9.6%).
Rising capital intensity keeps return ratios subdued:
BHFC’s
continued investments in non-automotive businesses over the
past few years have led to increased capital intensity (i.e.
increased capex and working capital requirement). However, its
operating performance has been muted, leading to a lower RoCE
of 9.6% (FY16: 10.5%). Subdued revenue growth led to low asset
turnover of 0.7x (FY16: 0.8x). RoE adjusted to exceptional gain on
JV stake sale declined to 15.5% in FY17 (FY16: 19.7%). Dupont
analysis highlights RoE are supported by a high equity multiplier
ratio of 2.3x (Exhibit 3).
Deteriorating cash conversion cycle dents OCF:
Operating cash
flow declined to INR10.5b (FY16: INR13.6b), primarily due to
deterioration in the cash conversion cycle to 107 days (FY16: 94
days). This was mainly on account of an increase in inventory
days to 161 (FY16: 141 days), partially offset by a rise in payable
days to 127 (FY16: 119 days). FCF post interest declined to
INR2.9b (FY16: INR3.4b), but was supported by a reduction in
capex to INR6.6b (FY16: INR9b).
Related party purchases remain substantial:
BHFC’s purchases
from entities owned by KMP stood at INR7.1b, 28% of total raw
material cost. Purchases from related parties, albeit significant,
have declined from FY16 (stood at INR14.1b, 53% of total raw
material cost).
Shareholding pattern (%)
Promoter
DII
FII
Others
Note: FII Includes depository receipts
Stock Performance (1-year)
Auditor’s name
S R B C & Co LLP
Research analyst
Sandeep Ashok Gupta
(S.Gupta@MotilalOswal.com); +91 22 39825544
Mohit Baheti
(Mohit.Baheti@MotilalOswal.com); +91 22 3010 2492
Somil Shah
(Somil.Shah@MotilalOswal.com); +91 22 3312 4975
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

ART
|
Bharat Forge FY17
Rising capital intensity keeps RoCE muted
BHFC’s focus on increasing its presence and fueling growth in the non-
automotive businesses of power, oil & gas (O&G), construction & mining,
railways, marine and aerospace has increased capital intensity over the past
few years.
While capital intensity has been increasing, the operating performance of these
businesses has been subdued and pulling down the return ratios of the group.
RoCE declined to 9.6% in FY17 (FY16: 11.4%) due to lower EBIT of INR6.8b
(FY16: INR7.3b) and rising capital intensity of INR72.4b (FY16: INR67.9b).
Exhibit 1: Rising capital intensity dents RoCE (INRb)
Capital Employed*
6.5%
9.5%
12.5%
RoCE
10.5%
9.6%
Rising capital intensity
along with weak operating
performance pulls down
RoCE to 9.6%
58.0
FY13
61.4
FY14
71.7
FY15
68.0
FY16
72.5
FY17
*Adjusted for receivable discounted
Source: Company Annual Report, MOSL
The muted performance has led to lower revenue growth, and in turn, muted
asset turnover ratios over the past few years (FY17: 0.7x v/s FY16: 0.8x).
However, a high financial leverage ratio of 2.3x has been aiding the return on
equity (18.9% v/s FY16: 19.7%).
Exhibit 2: Subdued assets turn over FY13-17 (INRb)
Assets
0.9
Sales
0.9
Assets Turnover (x)
0.8
Slower revenue growth
leads to subdued assets
turnover of 0.7x
0.7
0.7
76.0
53.3
75.3
68.7
82.3
77.9
82.9
70.0
88.4
66.0
FY13
FY14
FY15
FY16
FY17
Source: Company Annual Report, MOSL
26 December 2017
2

ART
|
Bharat Forge FY17
Exhibit 3: Low assets turn and NP margin…
Particulars
(A) Net profit margin
(B) Assets turnover (x)
(C) Equity multiplier (x)
RoE (A)*(B)*(C)
FY14
7.3%
0.9
3.1
20.2%
FY15
9.8%
0.9
2.7
24.9%
FY16
9.6%
0.8
2.4
19.7%
FY17
10.8%
0.7
2.3
18.9%
FY17
(Adj)
8.8%
0.7
2.3
15.4%
11%
20%
Exhibit 4: …leads to declining return ratios
Adjusted ROE
25%
20%
15%
Source: Company Annual Report, MOSL
FY13
FY14
FY15
FY16
FY17
Source: Company Annual Report, MOSL
Operating cash flows fund capex
Over FY13-17, operating cash flows remained robust, contributing 96% of funds.
Capex utilized 55% of funds, while payment of interest and repayment of
borrowings utilized 14% and 13%, respectively. 14% of funds were distributed in
the form of dividend.
Exhibit 6: Funds primarily utilized for capex
Application of fund FY13-FY17
Other income,
4%
Sale of
Investments,
5%
Cash, -5%
Borrowings
(Net), 13%
Purchase of
Financial
Instruments,
4%
Exhibit 5: CFO primary source of funds
Sources of fund FY13-FY17
Operating
Cash Flow,
96%
Dividend,
14%
Capex, 55%
Interest, 14%
Source: Company Annual Report, MOSL
Source: Company Annual Report, MOSL
Rising cash conversion cycle hurts cash flows; lower capex supports FCF
Rising working capital
requirement dents OCF to
INR10.5b (FY16: INR13.6b).
BHFC’s cash conversion cycle deteriorated from 94 days in FY16 to 107 days,
leading to muted operating cash flows of INR10.5b (FY16: INR13.6b).
Rising inventory days (FY17: 161 v/s FY16: 141) led to a deteriorating cash
conversion cycle, partly offset by increased payable days (FY17: 127 days v/s
FY16: 119 days).
Also, lower OCF led to subdued free cash flows post interest of INR2.9b (FY16:
INR3.4b), despite lower capex of INR6.6b (FY16: INR9b).
BHFC extensively discounts its receivables on a recourse basis. Bills discounted
stood at INR7.9b (FY16: INR8.5b). Unlike in previous GAAP, Ind-AS does not de-
recognize discounted trade receivables, as the group retains late payment and
credit risk. Accordingly, BHFC restated trade receivable and borrowings for FY17
and FY16.
26 December 2017
3

ART
|
Bharat Forge FY17
Exhibit 7: Weak operating performance and rising capital intensity dent OCF (INRb)
Particulars
PBT
Add/Less: Non-cash/Non-Operating adjustments
Less: Direct Taxes Paid
Add/Less: Exceptional Gain/(Loss)
Operating Profit Before Working Capital Changes
Trade & Other Receivable
Inventories
Loans and Advances
Other Financial Assets
Other Current Assets
Trade Payable
Other Current Financial liabilities
Other Current Liabilities & Provisions
Cash Generated from Operations after Tax
Adjustment for bills discounted
Adjustment for acceptances
Adjusted cash flows from operations
Less: Financial Cost paid
Adjusted Cash Flow from Operations post Interest
Less: Capital Expenditure
Cash Flows after Capex & Investments
FY13
4.2
4.2
(1.2)
0.4
7.6
0.2
(0.4)
(0.4)
-
(0.6)
(2.6)
-
3.6
7.3
1.6
0.8
9.8
(1.9)
7.9
(5.6)
2.3
FY14
6.3
3.6
(2.1)
1.0
8.8
(0.5)
0.9
(0.4)
-
(1.0)
1.3
-
(2.0)
7.2
0.2
(1.6)
5.7
(1.7)
4.0
(0.2)
3.8
FY15
10.9
4.3
(4.1)
0.4
11.5
(0.2)
0.0
(0.3)
-
(0.3)
0.7
-
(1.1)
10.3
(4.6)
2.2
7.9
(1.5)
6.5
(7.1)
(0.6)
FY16
9.7
5.0
(3.0)
(0.1)
11.6
2.2
(1.3)
(0.0)
(0.4)
1.5
(0.7)
(0.0)
0.6
13.6
-
-
13.6
(1.2)
12.4
(9.0)
3.4
FY17
8.2
4.1
(2.7)
1.3
10.8
0.1
(0.8)
(0.0)
(0.2)
0.5
0.2
0.3
(0.4)
10.5
-
-
10.5
(1.0)
9.5
(6.6)
2.9
Source: Company Annual Report, MOSL
Exhibit 8: Cash conversion cycle deteriorates
Particulars
Inventory Days*
Receivable Days
Payable Days
*
Cash conversion cycle (Days)
Bills Discounting
Adjusted Cash conversion cycle (Days)
#
FY13
181
53
148
86
37
123
FY14
118
45
119
44
28
72
FY15
112
39
123
28
46
74
FY16
141
72
119
94
-
94
FY17
161
73
127
107
-
107
*Calculated on Cost of Goods Sold; #Calculated on revenue
Source: Company Annual Report, MOSL
Slowdown in standalone exports impact operating performance
Consolidated revenue
declined by 6% to INR66b
due to Slowdown in US
class 8 truck market.
BHFC’s consolidated revenue declined 6% to INR66b, marking FY17 as another
year of a muted operating performance (triggered by the slowdown in the US
class 8 truck market and the continued sluggishness in commodity-related
sectors).
Slowdown in the US class 8 truck market resulted in a drop of 30% in the export
CV business of standalone operations to INR9.9b (FY16: INR14.2b). However,
growth in Europe HCV and domestic M&HCV businesses provided some
support. CV business’ contribution to standalone operations declined to 50% (at
INR17.9b; FY16: 54%, INR21.7b).
Subsidiaries’ (derived) performance improved marginally in terms of revenue
(contribution increased to 38.3% or INR25.3b, from 35.4% or INR24.8b in FY16).
Personnel cost increased to 14.1% of revenue (INR9.3b; FY16: 13.1% of
revenue, INR9.2b; FY15: 11.6% of revenue, INR9.0b).
26 December 2017
4

ART
|
Bharat Forge FY17
EBITDA declined to INR12.5b (FY16: INR14.1b), with the margin contracting
115bp to 19% (FY15: 20.1%) due to a subdued standalone performance. The
EBITDA margin at standalone operations contracted to 26.4% (FY16: 29.1%).
Standalone
Subsidiary (Derived)
%
100
32
68
32
9
26
FY16
24.8
10.9
13.9
7.6
5.4
0.9
%
100
44
56
31
22
4
FY17
25.3
11.2
14.1
6.8
5.5
1.8
%
100
44
56
27
22
7
FY16
70.0
25.8
44.3
21.0
9.2
14.1
Consolidated
%
100
37
63
30
13
20
FY17
66.0
24.4
41.6
19.8
9.3
12.5
%
100
37
63
30
14
19
Exhibit 9: Consolidated earnings dragged by muted subsidiary performance (INRb)
Particulars
Revenue from Operations
Raw Materials Consumed
Gross Margin
Operating and Administrative Expenses
Personnel Cost
EBITDA
FY16
45.3
14.9
30.4
13.5
3.7
13.2
%
100
33
67
30
8
29
FY17
40.7
13.2
27.5
13.0
3.8
10.7
Source: Company Annual Report, MOSL
Exhibit 10: Weak CV market dents standalone revenues (INRb)
PV
29.0
31.2
CV
Non Auto
41.9
Total
40.0
14.9
21.4
3.6
FY16
36.0
19.5
11.5
14.8
2.7
FY13
12.8
15.9
2.4
FY14
19.3
3.2
FY15
14.4
17.9
3.8
FY17
Source: Company Annual Report, MOSL
Exhibit 11: Europe HCV helps improve US truck demand
US Class 8 trucks
297
249
267
220
CY12
239
225
296
228
Europe HCV
323
279
Exhibit 12: Continuous growth in domestic M&HCV
India M&HCV Production
341
281
222
267
343
CY13
CY14
CY15
CY16
FY13
FY14
FY15
FY16
FY17
Source: Company Annual Report, MOSL
Source: Company Annual Report, MOSL
Muted subsidiary performance drags overall RoCE
Subsidiaries’ aggregate performance, albeit improved YoY, dragged the overall
performance. Aggregated PBT (before exceptional gain) of subsidiaries stood at
INR0.1b, as against pre-tax loss of INR0.6b in FY16. This led to lower RoCE of
9.6% for the consolidated entity v/s the standalone entity (adjusted for
investment in subsidiaries).
26 December 2017
5

ART
|
Bharat Forge FY17
Exhibit 13: Performance of significant subsidiaries (INRb)
Name of Subsidiary
Subsidiaries
CDP Bharat Forge GmbH
Bharat Forge CDP GmbH
Bharat Forge Aluminiumtechnik Gmbh
Bharat Forge Hong Kong Limited*
Bharat Forge Kilsta AB
Bharat Forge International Limited
BF Infrastructure Limited
Bharat Forge Tennessee Inc
*Accumulated losses INR1.2b
5.3
3.1
1.3
(0.0)
0.2
0.5
0.2
-
0.1
12.9
4.2
-
6.6
10.0
-
-
(1.7)
0.0
0.0
(0.0)
0.1
0.2
(0.0)
-
5.8
3.0
1.3
(0.0)
0.1
0.7
0.2
0.5
0.3
11.6
4.2
-
5.6
9.9
-
-
0.6
0.2
0.3
(0.0)
(0.2)
0.2
(0.0)
(0.0)
Net Worth
FY16
Turnover
PAT
Net Worth
FY17
Turnover
PAT
Exhibit 14: Subsidiary muted performance…
PBT (Before exceptional item)
415
-2.0%
(130)
(591)
FY13
FY14
FY15
FY16
FY17
-1.2%
245
-2.7%
RoCE
1.6%
-1.1%
138
Exhibit 15: …keeps consolidated RoCE low
Standalone (Adjusted)
20.4%
12.5%
14.5%
14.8%
11.0%
7.8%
FY13
FY14
FY15
FY16
11.4%
9.6%
15.5%
11.8%
Consolidated
FY17
Source: Company Annual Report, MOSL
Source: Company Annual Report, MOSL
Non-core income contributed 12.6% of earnings
Non-operating income was high at INR1.2b (12.6% of PBT; FY16: INR1.3b, 13.7%
of PBT), primarily on account of dividend income from mutual funds and
interest income.
Cash and investments stood at INR15.3b (FY16: INR12.5b), 37.1% of net worth
with a yield of 5.1% (FY16: 5.2%).
Exhibit 17: Other income – significant portion of PBT (INR b)
Financial Income
24.7%
17.1%
0.6
Other Income
12.1%
0.7
13.7%
0.7
% of PBT
12.6%
0.4
Exhibit 16: High cash and investments (INR b)
Cash and investments
43.1%
45.6%
34.2%
36.6%
37.1%
Cash and investments % of NW
0.5
9.7
FY13
12.2
FY14
11.8
FY15
12.5
FY16
15.3
FY17
0.6
FY13
0.7
FY14
0.7
FY15
0.6
FY16
0.8
FY17
Source: Company Annual Report, MOSL
Source: Company Annual Report, MOSL
26 December 2017
6

ART
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Bharat Forge FY17
Strategic stake sale in JV boosts profitability…
BHFC divested its 49% stake in Alstom Bharat Forge Power (engaged in the
business of power equipment) in March 2017, leading to a net gain of INR1.3b
(13.7% of PBT) and cash flow of INR2.3b.
Alstom contributed INR0.1b to group profitability, as against INR0.3b in FY16.
BHFC sold its stake in David Brown Gear Systems India, resulting in minimal loss
of INR12.1m.
Consequent to the stake divestment in JVs, PAT increased 8% to INR7b (FY16:
INR6.5b), while PBT before exceptional items declined to INR8.2b (FY16:
INR9.7b)
Exhibit 18: Exceptional gain on JV stake sale boosts profitability (INRb)
Standalone
Particulars
EBITDA
Depreciation
EBIT
Financial Charges
EBT
Other Income
PBT (Before Exceptional Items)
Share of Profit from Jointly Controlled
Entity (net of tax)
Exceptional Items
PBT
Tax
PAT
FY16
13.2
3.1
10.1
0.9
9.2
1.1
10.3
-
(0.0)
10.3
3.3
7.0
%
29
7
22
2
20
2
23
-
(0)
23
7
15
FY17
10.7
2.9
7.8
0.7
7.0
1.0
8.0
-
0.4
8.4
2.6
5.9
%
26
7
19
2
17
2
20
-
1
21
6
14
Subsidiary (Derived)
FY16
0.9
1.4
(0.5)
0.3
(0.8)
0.2
(0.6)
-
(0.0)
(0.6)
(0.1)
(0.5)
%
4
6
(2)
1
(3)
1
(2)
-
(0)
(2)
(0)
(2)
FY17
1.8
1.6
0.2
0.3
(0.1)
0.2
0.1
-
0.9
1.0
(0.1)
1.1
%
7
6
1
1
(0)
1
1
-
4
4
(0)
4
FY16
14.1
4.5
9.5
1.2
8.4
1.3
9.7
-
(0.1)
9.7
3.2
6.5
Consolidated
%
20
6
14
2
12
2
14
-
(0)
14
5
9
FY17
12.5
4.5
8.0
1.0
7.0
1.2
8.2
-
1.3
9.5
2.5
7.0
%
19
7
12
2
11
2
12
-
2
14
4
11
Source: Company Annual Report, MOSL
…and thereby reduces debt
Repayment of INR2.5b led to a reduction in borrowings to INR31.2b (FY16:
INR33.8b), and in turn, lowered debt-to-equity to 0.8x (FY16: 1x).
BHFC redeemed outstanding debentures of INR1.4b, which carried high interest
coupon ranging from 10.75% to 11.95%, which would have primarily been
funded from stake sale in JVs.
Finance cost cushioned by cheaper borrowings
Majority of the borrowings (~87%) of BHFC are foreign currency denominated
and usually have a low coupon rate. Redemption of high interest rate bearing
debentures in FY17 has helped to reduce reported finance cost to 3.2% (FY16:
3.4%).
Adjusted for forex losses/gains capitalized, finance cost declined to 2.3% (FY16:
6.0%), primarily due to forex gain of INR0.2b in FY17, as against forex losses of
INR0.9b in FY16.
26 December 2017
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ART
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Bharat Forge FY17
Exhibit 19: Net debt declines (INRb)
Adjusted Net Debt
5.6
1.6
5.4
1.3
20.1
16.9
10.1
1.1
15.4
12.9
FY16
8.4
1.0
8.1
FY17
Bills discounting
Exhibit 20: Finance cost declines (INRb)
Adjusted D/E
Particulars
Finance cost(reported)
Interest Capitalized to CWIP
Forex losses capitalized
7.9
0.8
Finance cost(adjusted)
Finance cost % (reported)
Finance cost % (adjusted)
FY13
1.7
0.2
0.9
2.8
4.7%
7.4%
FY14
1.7
0.0
1.3
3.0
6.6%
8.6%
FY15
1.4
0.1
0.5
1.9
5.3%
5.4%
FY16
1.2
0.0
0.9
2.1
3.4%
6.0%
FY17
1.0
0.0
(0.2)
0.8
3.2%
2.3%
Source: Company Annual Report, MOSL
FY13
FY14
FY15
Source: Company Annual Report, MOSL
Significant purchases from entities owned/influenced by KMP
BHFC makes significant purchases of raw materials from enterprises owned or
significantly influenced by key management personnel (KMP), which primarily
includes Kalyani Carpenter Special Steel and Kalyani Steels.
Purchases from such related enterprises stood at INR7.1b in FY17, 28% of total
raw material cost (FY16: INR14.1b; 53% of total raw material cost).
Exhibit 21: High purchases from entities owned/influenced by KMP (INR b)
Particulars
Kalyani Carpenter Special Steels
Kalyani Steels Limited
Others
Total purchases from related parties
Related party purchases as % of
total raw material cost
FY13
9.1
2.4
-
11.5
50%
FY14
9.4
3.2
0.9
13.5
53%
FY15
10.8
4.1
2.8
17.7
62%
FY16
9.0
3.6
1.5
14.1
53%
FY17
2.6
4.0
0.6
7.1
28%
Source: Company Annual Report, MOSL
26 December 2017
8

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NOTES
26 December 2017
9

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice. The matter is currently
pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
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MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and
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as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the
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Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in
the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
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b)
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c)
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d)
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MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
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companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
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Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to,
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been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice.
The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
ART
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Bharat Forge FY17
Disclosure of Interest Statement
Analyst ownership of the stock
Bharat Forge
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with
Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any
investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research
Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is
not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional
investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or
appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations
as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time
without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities
mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MSE); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser:
INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS
(Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal
Commodities Broker Pvt. Ltd. offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private
Equity products
26 December 2017
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