>BHARAT FORGE LIMITED (MF GLOBAL)

Business fundamentals gaining strength

We met the management to BFL to examine the state of domestic and overseas business, seek clarity on JVs, recently announced fund raising, FCCB redemption and various other issues. While the initial feed remains cautious, we discovered that the challenging business environment has made BFL more determined on their future projects - be it auto ro non aunto. Add to this, one area that in our view hold stupendous potential and hence a major trigger for BFL's growth outlook are the JV's with Alstom, Areva and NTPC - meant for aggressively capitalizing the opportunity the capital goods forging space offers (mainly Power).

• Domestic busniess stablizing, overseas markets still mixed
• Non-auto capacity ramp up in FY11, to enjoy 3-4% better margin.
• Operating margins set to revive strongly
• JV's meant for capitalizing opportunities in Cap. Goods space

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