Bharat Forge Ltd.
The dollar index has been rising from the last one month and seems to be heading higher. The stock market is inversely correlated to the dollar index. If dollar index starts falling from here, then we can see a good really in the stock market.
Bharat Forge, a steel forging and general engineering company, posted good results in Q3 FY10. The net sales rose 14% and the net profit was up at Rs.38 cr. as against Rs.4.3 cr. on YoY basis.
Bharat Forge operates in auto and non-auto sector. In the non-auto sector, the company has received some good orders from the energy sector and going forward, the management expects to achieve the target of 40% of its sales from non-auto sector by 2012.
The company has also signed deals with Alsthom and Areva. These deals are expected to start generating revenues from 2012. The management is very positive on the growth prospect of domestic automotive sector and the export business from North America and China.
Technically, the stock had a very good really from its lows near 70 in Jan 2009. It took a one way really to make a high of near 307 and since last 4 months, the stock is in a sideways-consolidation zone. The stock has multiple support between the levels of 220-230 where one can buy the stock, with a stop loss of closing below 220 from the next higher targets of 340+.
