- 25 Feb 2022
- ICICIdirect Research
Bharat Forge buys out industrial casting player in south IndiaBHARATFORG - 778 Change: -9.75 (-1.24 %)
News: Bharat Forge has acquired south India based casting player JS Auto Cast Foundry India Pvt Ltd (JS Auto). JS Auto (established in 2004) is a leading supplier of machined critical castings for Industrial applications (wind, hydraulic, off-highway) and clocked revenues of Rs.259 crore in FY21 with high double digit return ratios.
Views: Currently, JS Auto is working at ~50-55% of its installed capacity (i.e. 45,000 tonnes). With prominent presence of JS Auto in renewable energy space, this acquisition would help Bharat Forge diversify and de-risk the existing business, which is skewed towards CV and oil & gas space. The management expects the acquisition to be EPS accretive from day 1 but it did not disclose the amount paid for it. Overall, in the long term, it bodes well for the company and will help in expanding the customer base, going forward.