Three Stocks Worth Buying After Q3FY15 Results By Amar Ambani Of IIFL

Bharat Forge (Q3 FY15) – BUY
CMP Rs1,065, Target Rs1,350, Upside 26.7%

• Revenues at Rs11.9bn higher by 44% yoy; better than our estimates
• Tonnage volumes surged 24.8% yoy and 1.8% qoq
• Realizations were higher by 15.3% yoy and 3.8% qoq
• OPM at 30.2% was higher by 447bps yoy, on the back of benefits of operating leverage, better product mix and higher value addition
• PAT at Rs1.9bn jumped 109% yoy and 12.5% qoq; was substantially better than our estimates
• Outlook for domestic auto business is improving but will take time to stabilize, while non-auto business should see large opportunities from the Make in India campaign, Outlook for US market is robust
• Maintain our BUY rating with a revised 2-year price target of Rs1,350

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LG Balakrishnan Bros (Q3 FY15) – BUY
CMP Rs575, Target Rs885, Upside 53.9%

• Revenues at Rs2.6bn higher by 3.7% yoy; was lower than our estimates, while the growth in transmission segment was strong at 7.6% yoy, metals forming segment reported lower than expected growth at 4.3%
• OPM at 11.9% was flat on a yoy basis but declined 163bps sequentially owing to an EBIT loss of Rs33mn in other segment (Wind mill and Tata Motors LCV business)
• PAT at Rs145mn was lower by 15% yoy and 3% qoq
• Maintain our BUY rating with a lowered 2-year price target of Rs885

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Strides Arcolabs (Q3 FY15) – BUY
CMP Rs933, Target Rs1,075, Upside 15.1%

• Consolidated sales flat qoq while global pharma EBIDTA up 8.5% yoy
• Institutional sales jumped ~58% qoq on higher anti malarial supplies while regulated market revenues impacted by lower profit share on Vancomycin
• Reiterate BUY on the back of growth, margin levers in combined Strides + Shasun businesses with revised 9-12mth target of Rs1,075

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