Rs 5,700 Crore order book: Forging company executes SPA for acquisition of 100 per cent shareholding in AAM India Manufacturing Corporation Pvt Ltd
The company's 2-Year Return stands at 47 per cent, while the 5-Year Return is 350 per cent.
Bharat Forge Limited has received approval from the Competition Commission of India (CCI) for its proposed acquisition of 100 per cent shareholding in AAM India Manufacturing Corporation Private Limited. This clearance, granted via a letter dated April 22, 2024, is a significant step forward for the deal, which is still subject to the fulfilment of certain conditions and the receipt of other necessary regulatory approvals as outlined in the Share Purchase Agreement. While the detailed order from the CCI is still pending, this development indicates a positive outlook for the completion of the acquisition.
Bharat Forge, part of the Kalyani Group, is a leading manufacturer and exporter of auto components, with a significant presence in the global market for powertrain and chassis components. The company operates primarily in two business segments: Forgings and Defence & Others. The Forgings segment, which includes products like steel forgings and machined crankshafts, accounted for 85 per cent of revenue in FY24, growing by 35 per cent since FY22. The Defence segment, under Kalyani Strategic Systems Limited, saw a remarkable 280 per cent growth in the same period, driven by a robust order book.
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Bharat Forge's geographical revenue distribution has shifted, with increased contributions from the USA and the Rest of the World. The company is expanding its defence manufacturing capacity and investing Rs 1,000 crore in capex for FY25-FY26. Recent strategic moves include acquiring JS Autocast Foundry India Pvt Ltd and establishing an AI/Digital manufacturing centre. Bharat Forge's focus on innovation is reflected in its portfolio of 97 patent families and recent partnerships to develop advanced artillery platforms.
The stock has a 52-week High of Rs 1,826.20 and a 52-Week Low of Rs 919.10. Bharat Forge has a market capitalisation of over Rs 55,000 crore and its order book stands at Rs 5,700 crore. The company's 2-Year Return stands at 47 per cent, while the 5-Year Return is 350 per cent. The Price-Earnings (PE) Ratio is 65.
Disclaimer: The article is for informational purposes only and not investment advice.