By 2014-15, more than 75% of BFL’s revenues will come from non-automotive businesses, especially through initiatives in power, oil and gas, marine transport, railways and aerospace sectors. “A double-digit growth for the Indian economy requires a major expansion of the capital goods sector to effectively feed an industrial upsurge. We aim at contributing to the growth of the capital goods sector in India,” says Baba Kalyani, chairman, BFL. It has garnered its most expansive plans in power sector.

Hi Basantji,
Considering this whats your take on this.
 - this company has very good management
 - from 2014 onwards the non-automotive revenue share will be 75% which appears to be huge. Also it will bring lot of stability to the revenues.
 - However I read somewhere there is chance of 10-12% equity dilution in future.
 - Comprehensive infrastructure play with strong and quality manufacturing
   capability.
 
   Basantji it would be great if you could share few thoughts about this company

Thanks a lot Basantji,
this is about 28% CAGR and that too for a period of 30 years.
really impressive.

http://www.indiaabroad.rediff.com/money/2005/jun/13spec1.htm
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1657&specialid=62

Good articles about the company.
"Firstly, auto ancillary business has far more entry barriers than software services. What makes the auto ancillary tougher is that unlike in IT services, cost competitiveness alone is not the key driver - it is an extremely skill- and design-intensive industry. It takes a long time to develop competencies in this business.

Having developed the skill sets, put up capacities and established credentials with clients, it is only a matter of leveraging that strength for Bharat Forge.
In software services, business tends to be episodic where clients engagements tend to be on a project-by-project basis, depending on the requirements.
Secondly, Bharat Forge's business is more scaleable in the sense that the company can address a large size of business without much additional efforts. As scale builds up, the company could realise better economies of scale which may improve profitability significantly."

It seems entry barrier is quite phenomenal and bharat forge is scaling its business to other related areas.

It is looking very expensive at the moment but we have to take into account fate of GM and Ford which did the damage to Bharat Forge.
Once auto stabilizes and other revenue streams starts to chip in then we can have solid compounder once again

Conference Call      
          Bharat Forge
Will focus to expand margins of overseas subsidiaries in 18 months


Bharat Forge held conference call on 10th Aug 2011 to discuss its performance for the quarter ended June 2011. The meeting was presided over by Mr. Amit B Kalyani - Executive Director, Mr. Sanjeev Joglekar – CFO and Mr. Mohan Sapre - Sr. VP (Finance)

Key Highlights from the Discussion
Despite the weakness abroad, the company has not yet received any indication of change in plans for its customers. Its major customers expect 30-40% growth this year.
It has lined up capex of Rs 200-250 crore per year in FY 12 and FY 13. It includes the capacity expansion of machining by 30-35%.
It plans to expand margins of international subsidiaries from single digit to double digit in next 18 months.
It plans to double the machining in non auto from current 30% in 1.5-2 years.
Expects the Alstom JV to start generating significant revenue from 2013.
It sources 20% of steel requirement from Kalyani Steel which has been shutdown.
The production grew by 24% to 52959 tonnes from 42643 tonnes in June 2010 quarter.
Exports grew by 67% driven by CV demand and improvement in non auto front in US and Europe.
Non auto business grew by 51% to Rs 284 crore in June 2011 quarter on ramp up of new plants and demand from domestic and exports across sectors. It constituted 37% of standalone topline. Significant position of non auto business is in India now. The share of India in non auto business would be 40% and 60% in overseas in 2-3 years time.
Contribution from new facilities to topline was Rs 161.50 crore, up by whopping 98%.
The capacity utilization of older plants was at average 78%, of new plants at 50% and of subsidiaries at 55%.
Net working capital as 30th June 2011 is Rs 590 crore.