Last year, the company had divested its holding in Kalyani Lemmerz from 75 per cent to 15 per cent resulting in a fund inflow of Rs 68 crore. The withdrawal of money from capital market, money market, and inter-corporate loans also generated around Rs 100 crore last year. This will not only help the company's interest burden but will also force market to re-rate the stock. And that is already visible in northbound price chart of the stock. The outlook for the rest of the year appears positive especially when one were to consider the signs of recovery in commercial vehicle sector. Looking at the current trends, maintaining the sales growth would not be a major problem for Bharat Forge. As far as the profit margins are concerned, while reduced interest burden would play its role, measures taken to reduce cost is will also play its role. Last year, cost were brought down by nearly Rs 8 crore in areas like finance, energy, raw material, inventory and manpower. A renewed focus on export also augur well for thefuture. Last year, the company had a lower exports figure due to recessionary trends in Japan, South East Asia, and Latin America. This is expected to improve drastically in the current year.

As far as the stock market is concerned, the stock is more than doubled in the last three months, and is very close to its 3-year high. Technically, the stock is extremely bullish. In weekly charts, the stock has a major resistance only at around Rs 200 which is very far from the current levels. As for medium term investors, the stock has a strong support at Rs 80, and a fall below this level is unlikely. For extremely short-term investors, all the long position should be liquidated below Rs 107 level.

--Deepak Singh Tanwar