Stock in Action,20Feb2023.

Bharat Forge: Bharat Forge, a leading metal forging auto ancillary company, has posted a strong set of numbers for the third quarter of FY23 despite multiple challenges coming in from international markets. The performance got a boost from the pickup in demand, driven by a rich product mix and the growth in the export markets. Further, the demand momentum in international markets is expected to continue, and new focus areas are likely to drive growth in the coming years. With the opening up of the broader economy, the management is also very optimistic about the demand in the CV segment as it expects construction, mining and infrastructure activities to pick up.In terms of the demand outlook for the industrial segment, the company expects business to grow meaningfully with a revival in the capex cycle, and the potential opportunities arising out of various production-linked incentive schemes and defence manufacturing in India. In the EV segment, the company is seeing strong traction. The EV vertical has secured orders from a global EV OEM for supplying aluminium castings and has got an order from an Indian OEM. Positive on Bharat Forge given the strong 3QFY23 performance and reasonable valuation.

PNC Infratech: The central government has emphasised infrastructure development given its importance in job creation and boosting economic growth. PNC has started execution of the Jal Jeevan Mission projects and expects to accelerate execution in the next fiscal, guiding for revenues of Rs 2,000 crore from the segment. Project monetization would enable the smooth execution of existing projects as well as enable PNC to take on new projects. Growth moderated owing to the extended monsoon, which affected project execution. About 82 percent of the revenues booked in the quarter were from the road segment while the rest were from water space. Central Government has taken a lead in the infrastructure development once again. The recent Union Budget enhanced the government’s capital expenditure on infrastructure by a strong 33% to Rs 10 lakh crore. PNC expects strong order inflows in the current quarter given that Q4 is seasonally strong from the government project awarding perspective. PNC also expects some new orders in the ongoing Jal Jeevan Mission projects in Uttar Pradesh. Overall, PNC expects order inflows worth Rs 8,000 to 10,000 crore in the current quarter. PNC is amongst the few infrastructure companies with a track record of financial prudence. Its debt to equity ratio has remained in the range of 1.5-1.7x and the company has maintained balance-sheet health. Positive on PNC Infratech given the strong order inflow and healthy order book which ensures strong revenue growth visibility.

KEC Intl CMP (475.3)
The infrastructure EPC major has received
orders worth Rs 3,023 crore under its
civil, cables and transmission &
distribution segments.
POSITIVE

Dilip Buildcon (208)
The company has received the letter of
acceptance (LOA) from the Madhya
Pradesh government..
POSITIVE