Saturday, April 28, 2012

BHARAT GEARS LTD - BUY






Bharat Gears Ltd(BGL) is one of the largest Gear manufacturer in India.This company was originally promoted by Raunaq and company in 1971.Company is operating with three business divisions- Gears,Furnaces and Automotive components. Now BGL having two manufacturing facilities and planning to add one more in Maharastra. BGL’s total gear manufacturing capacity is divided as 6 lac units of Hypoid Ring Gear & Pinion ,10 Lac Differential Gears & Crosses and 22 lac  Transmission Gears .It is one of the major suppliers of gears to tractor industry with customers like Escorts,John Deere,M&M TAFE,Carraro..etc . In the non farm segments BGL’s customer list includes Ashok Leyland,Tata Motors,JCB,Toyota Kirloskar ..etc .In addition to gear business BGL also in heat-treating furnace systems with  technical collaboration of  AFC-Holcroft of USA. Out of the total sales ,about 90% is coming from Gear segment.Company supplying 80% of its gears to OEM’s and  selling the rest in replacement market.After a long period of slow growth now company is moving with pace.BGL already crossed the last full year profit figures in just 9 months of this FY even excluding other income.Normally fourth quarter figures are the best for the company .Based on the prediction  of normal monsoon for this year also tractor demand is expected to improve .This will positively impact company’s sales .In addition to this, benefits from the capacity expansion and  sales from new manufacturing facility will add to its bottom line in next few years.Increase in raw material cost is a factor to watch .Considering all these factors ,BGL is expected to post a Sales around Rs.430 Cr and a net profit of Rs.15 Cr in this FY.It may post an EPS around Rs.20/- .At current market price of Rs.80/- BGL is trading with a market capitalization of just 62 Cr which is very low for a market leader with turnover of more than Rs.400 cr. BUY BGL  at CMP of Rs.80/- which is trading both in NSE and BSE.

36 comments :

  1. Dear Value Pick
    Thank you very much for your recommendations. May I seek your coveted opinion on JINDAL POLY FILMS? I hold 410 shares of this company at an average rate of Rs.300/-
    Regards,
    Aravind

    ReplyDelete
    Replies
    1. End product price is fluctuating sharply in past few months

      Delete
  2. it seems over price compared to other.

    ReplyDelete
  3. Dear ValuePick,

    What is the average PE for the auto ancillary industry? I checked the BSE website but it listed Bosch and a couple of other companies that I am not sure can be used as the benchmarks.

    Thanks,
    RN

    ReplyDelete
  4. Value pick sir
    why have you deleted the comment of one mr mohit kaushal if i remember correctly who rightly pointed that the share has already moved from 40 to 80 quiet recently?

    you are far above all this i thought?

    ReplyDelete
    Replies
    1. None of the published comments deleted

      Delete
  5. Tasty Bite: depends on results of Q4, now huge loss (PP: 149)
    Aries Agro: No takers (PP: 98)
    Claris Life: Back to Square One (PP: 190)
    NBCC: Not moving (PP: 96)


    This is the plight of my portfolio :(
    I bought all of them, on or below your recommendation price (PP: Purchase Price). Please advice.

    ReplyDelete
    Replies
    1. It seems your are selecting some stocks from the whole lot just for criticizing my postings.I have recommended Tasty Bite on February 27,2010 @Rs.165.Thereafter in 6 months ,ie, in July , It hits a high of Rs 346/-. This means an appreciation of more than 100% in just 4 months.I have never recommended it as a BUY after 4th quarter result of this FY as mentioned by you.

      In the case of Aries Agro - even if it once touched Rs.206 after my first recommendation @ Rs.100/-I have recommended it later at higher level and it is really an under performing case.

      Claris recommended in this month @ Rs.158 and now trading @ 187/- ( last year claris mentioned to points out the importance of management quality in getting higher valuations)

      NBCC - Recommended only last week ,don't consider it as a place providing 'Tips'.This is just meant for only investors who are willing to do some homework

      Delete
    2. I am sorry but I did not mean any offence. These are stocks in my portfolio running in little bit loss and not just to criticise you. However I am a regular to your blogsite and very much grateful to you.

      Thanks a lot

      Delete
  6. DEAR VALUE
    SHANTHI GEARS IS NOT BETTER THAN BHARAT GEARS?
    PATIDAR

    ReplyDelete
    Replies
    1. Shanthi Gear is mainly supplying its gears for non auto segment which is not in a good shape now.

      Delete
  7. Dear Valuepick
    I was gong through your old recommendations ITL and Srinivasa Hatcheries , whts your call on them now?. one more request is pls consider revisiting your old recommendations which has corrected a lot now just giving one word revisit on them loke buy hold exit
    rgds
    Praveen

    ReplyDelete
    Replies
    1. Dear Praveen
      May consider Srinivasa,In the case of your suggestion ,it is practically very difficult due to time constraint .I am expecting follow ups and some homework from your side too while taking decisions on my past recommendations.If you have any query on a specific company in this matter just mail to me.

      Delete
    2. thanks a lot sir u have made made our life really easy , otherwise finding companies for value investing is very difficult in this ocean i was following many ppl u, rj, dhamani, Sanjay Bhattacharya but your service to society is impeccable I even tried paid service looking to invest in Buffet way is very very very difficult
      you have not commented on ITL? whats call

      Delete
  8. Hello Value Pick Sir,

    I would appreciate if you could shed some light on DISA India stock. I have observed the promotors have increased there holding to 86% from 72%.

    Thank you
    Anand

    ReplyDelete
    Replies
    1. Dear Anand

      Difficult to make a Call on DISA,everything depends on promoters decision to de-list or not

      Delete
  9. ADITYA JI
    U R RIGHT AS I HAVE ALSO NOTED SAME. BUT WE MUST SEE MY ABOVE VIEW THAT " IT SEEMS OVER PRICED"
    BUT DEAR DO NOT FORGET THAT MARKET IS BEYOND THE IMAGINATION.

    ReplyDelete
  10. Do you track sumeet industries, india infoline, PNB gilts

    ReplyDelete
    Replies
    1. Dear Prasad

      No opinion on Sumeet ,India Infoline is not bad but the entire sector is expected to under perform in near future.Not tracking PNB gilts

      Delete
  11. Dear Sir,

    Thanks for your valuable posting and guidance to investor. Your most of the recommended stocks are performing very well. Can you suggest some book on fundamental analysis/value investing?

    ReplyDelete
    Replies
    1. Value Investing: From Graham to Buffett and Beyond is a good book on this subject

      By

      NK,Assam

      Delete
  12. Dear Sir, can you shed some light on S Kumar national wide? Rgds

    ReplyDelete
    Replies
    1. I have no faith in the management of S Kumars (may be wrong ....)

      Delete
  13. Do you track Ganesh Ecosphere former Ganesh Polytex

    ReplyDelete
    Replies
    1. Not strictly tracking this company , but the business having some potential and the ability of management to tap it will decide its future.

      Delete
  14. How is Techtran Polylenses for investment in long term?

    ReplyDelete
    Replies
    1. No change in my previous opinion , may take some time..

      Delete
  15. I have shares of Avantel Ltd in small quantity. Yesterday company announced its quarterly results & apparently it reflects too bad, so please go through

    ReplyDelete
    Replies
    1. Scrip may trade range bound in near future.

      Delete
  16. Hello Sir,

    What's the take on Avanti Feeds presently. Unfortunately, I bought it at a very high price of Rs 150/. Willing too hold it for a year (till Sep '12)

    Thanks a lot,
    Bhupesh

    ReplyDelete
    Replies
    1. Dear Bhupesh

      Avanti's business is seasonal and generally first two quarters are good.

      Delete
  17. Hi,
    I also entered the couner when it was recommended here and made a profit of 25000/- in a span of one month. And reentered the same at rs 120, but did not feel comfortable with the co, immediately came out by booking loss of 15000/-. I am simply sharing personal view only. Regards Rama Mohana rao

    ReplyDelete
  18. Dear Value pick Sir,
    Nitta was another great pick.
    Bharat Gear-this is the only stock which has fallen post your recommendation ( may be due to the recent market churn).

    Would you suggest remaining invested in Bharat gears ?
    Also for Schneider, can I make fresh positions now?

    Please advise ...

    ReplyDelete
  19. Bharat Gears net profit rose 95.41% to Rs 5.96 crore in the quarter ended March 2012 as against Rs 3.05 crore during the previous quarter ended March 2011. Sales rose 21.48% to Rs 116.67 crore in the quarter ended March 2012 as against Rs 96.04 crore during the previous quarter ended March 2011.
    For the Audited full year,net profit rose 91.45% to Rs 18.59 crore in the year ended March 2012 as against Rs 9.71 crore during the previous year ended March 2011. Sales rose 28.30% to Rs 424.05 crore in the year ended March 2012 as against Rs 330.51 crore during the previous year ended March 2011.


    Sir , Is it time to add more and make it a part of core portfolio for minimum of 3years

    ReplyDelete
  20. Whats going on here ... significantly down after June 2012 result ?

    ReplyDelete
  21. Hi sir,
    As per your recommendation i have purchased bharat gears at Rs 80/- per share. Right now the stock is trading at 65/-. Should i hold this stock?

    Regards
    Deepa

    ReplyDelete

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