100% PROFIT(Target Achieved) - BHARAT SEATS LIMITED (BSL)

Dear Readers,

I would like to inform you that my recommended Stock "Bharat Seats Limited " had given 100% Return on 10th October'2017 within a 2 months.

I have recommended Bharat Seat at 100 Rs for the target of 200 Rs and it was touched 200 Rs on 10th October'2017 fetching 100% Return.

Passion pay rewards.

Happy Investing!!

Kamlesh

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Dear Readers,

I would like to inform you that my recommended Stock "Bharat Seats Limited " is giving 90% Return today within a 1.5 months which is a rock star return.

I have recommended Bharat Seat at 100 Rs and today is 190 Rs.

Friends, Book the Profit in Bharat Seats Limited today.

Passion pay rewards.

Happy Investing!!

Keep visiting my blog website.

Regards,

Kamlesh



Equity Research Report – Auto Ancillaries

Buy -Hold for 3 years         Target: 200 Rs.

Date: 14/07/2017

BHARAT SEATS LIMITED (BSL)

    By Kamlesh Bavrva

Dear Readers, today Bharat Seats Ltd has touched the new 52 Week high value even though i am recommending this stock to buy due to company’s strong fundamentals.

Sort term investor can buy stock between 90 to 95 if stock is getting correct otherwise for long term investor you can buy now and add on dips and hold for 3 years to get the multi return.

CMP: 100

BSE Code: 523229

Market Capital: 322 Cr.

Face Value: 2

52 Week Low / High: 105/40

Book Value: 20

Price/Book Value: 5

Dividend (%): 45%

Promoter Share Pledge - Nil

Company Overview:

v Incorporated in 1986.

v It is belongs to Relans Group.

v  It is a joint Venture of Suzuki Motor Corporation (14.8%), Japan, Maruti Suzuki India Ltd (14.8%), Sharda motor (28.7%) and the Relans family16%, all together holding 74% of control in the company.

v Bharat Seats Ltd is a seating systems manufacturing company mainly for two and four wheelers.

v The Company has manufacturing plants existed in Gurgaon.

It is producing Seating System for

v Four-Wheeler

v Two-Wheeler,

v Railway Seats & Berths,

v Moulded Carpets and

v Two-Wheeler Frames

v  Company is having technical assistance/collaboration with Houwa Kogyo Co, Japan for sealing system.

v Products:

o   Four wheeler seating system

o   Two wheeler seating system

o   Moulded carpets

o   Two wheeler frames and sheet metal components

o   Railway seats and berth

 

o   Two wheeler main frame

 

Manufacturing facilities:

v Bharat Seats has installed the latest state of the art equipments for the complete range of seating systems such as a High Pressure Polyurethane machines for foam moulding.

v PU Pad Line

v Seat Assembly Line

v Carpet Moulding Line

v Pipe End Swaging Machine

v CNC Tube Bending Machine

v Tube End Fine Boring Machine

Research & Development (R&D):

v The company also operates research & development centre which handles projects from the concept stage through modelling, designing prototyping to testing and validation for the final product. The centre has received approval from Ministry of Science and Technology Department of Scientific and Industrial Research.

Customers:

Bharat Seats - Shareholding Pattern:

Bharat Seats Share holding Pattern
Description	Percent of Share (%)
Promoters & Promoters Group	74.38
Public Holding	25.62
Total	100

Dividend History:

Bharat Seats Dividend
Year	Dividend (%)
2017	45
2016	45
2015	45
2014	40
2013	40
2012	40

Focus on - Financial Results March 2017:

v Bharat Seats Limited, has recorded standalone revenue from operation Rs 932 crore for the fourth quarter, ending on March 31 2017 compare to previous year 793 crore ending on March 31 2016 up by 18% on YOY basis.

v Bharat Seats Limited, has recorded standalone profits up to Rs 4.01 crore for the fourth quarter, ending on March 31 2017 compare to previous year 2.85 crore ending on March 31 2016 up by 41%.

v For the year 2017, ending on March 31, the standalone net profits surged to Rs 12.17 crore from the Rs 7.21 crore registered last year 2016 up by 69% on YOY basis.

Bharat Seats Limited (Rs. in Lakhs)
	Quarter Ended		Year Ended
Particulars	31.03.2017	31.03.2016	31.03.2017	31.03.2016
Revenue from Operations	25201.57	19887.99	93202.22	79302.98
Other Income	16.78	4.41	57.96	10.71
Total Revenue	25218.35	19892.40	93260.18	79313.69
Profit from operation before other income, finance cost and exceptional items	532.65	377.06	1921.16	1302.11
PBT	501.17	364.65	1681.99	984.03
PAT	401.24	285.12	1217.31	721.60
EPS	1.28	0.91	3.88	2.30

Financial Chart:

Opportunity:

v Indian auto component industry is playing major role for the Indian GDP Growth.

v It is one of the India’s sunrise industries with tremendous growth prospects.

v BSL is engaged in developing seating systems for passenger Car as well as Sports Utility Vehicles, Moulded Floor Carpets, Luggage Carpets, Extrusion Components for vehicle roof and windshield installation all for Maruti Suzuki India Ltd.

v BSL is also engaged in developing the Seats and the complete seat assembly for Two wheelers for Suzuki Motor Cycle India Pvt. Ltd.

 Threats:

v The threat revolving around are changes in Government regulatory requirements, shift in consumer demand etc.

Risks:

1.      BUSINESS RISK

v The operations of the Company are directly dependent on the growth of the Indian automotive industry. General economic conditions impact the automotive industry and in turn the operations of the Company.

v The Company is dependent on several factors such as changes in Government policies & legislation, economys growth, manufacturing input costs, cost inflation etc.

v The global automotive manufacturers are expanding their production capacities in India, leading to global competition which can only be countered by maintaining low cost product development.

v Although rising inflation, interest rates and crude oil prices are concerns of short term, the Company is optimistic about medium and long term and is gearing up for growth.

v The Company is actively exploring all new business opportunities in terms of product diversification.

2.      FINANCIAL RISK

v The Company is exposed to the risks associated with fluctuations in foreign currency rates on account of imports and foreign currency loans.

v The company’s sales and margins are subject to the market forces that affect Maruti and Suzuki Motorcycle India Private Ltd.

 Investment Rational:

1.     BSL, which is the pioneer in car seat manufacture in the auto sector, has incorporated many design and raw material improvements in its products to cater to the comfort and safety aspects of driving.

2.     The company is investing money for strengthening of R&D Department and Business Development which is good sign for the Company.

3.      The company is focusing the people training by experts from international pioneers, like Toyo Seats from Japan for Seating system design and Inoac, from Japan for extrusion to improve the production and to initiative new research.

RESEARCH & DEVELOPMENT:

v The R&D Department has successfully launched the seating system and started its supply for premium segment model “S-Cross” and “Vitara Brezza” to Maruti Suzuki.

v Besides, the R&D Department has launched many minor programs termed as Refresh in current platforms like Ritz, Ciaz etc.

4.     Bharat Seats Ltd current P/E is running below Industry P/E.

5.     Positive impact on BSL profit due to Maruti Suzuki and Suzuki Motor Cycle India Pvt. Ltd Revenue growth on YOY basis.

6.     Positive impact on Auto industry in long term due to GST implication.

7.     Strong YOY% increasing in Sale with Net Profit.

8.     Government focus in Road & Infra structure, Auto industry 2 wheeler will boost up.

Recommendation:

v Stock CMP is 100 Rs. and stock is trading at P/E 27 & TTM EPS 3.88, based on all above investment points and considering the EPS will come 6 in 2020, stock may touch 200 Rs. within a 3 years’ time horizon.

Please note:

v Note: The articles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure:It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.