29 June 2020 Bharat Forges (BHFC) 4QFY20 results were hit across segments, which led to sharp erosion in EBITDA margins. While the worst is expected in 1HFY21, leading indicators point toward possible sharp recovery in FY22E. We believe BHFC will emerge stronger from this down-cycle, strengthen its position in the global supply chain and possibly benefit from the potential diversification from China. We have cut EPS for FY21/FY22E by 79%/16% to factor in the weakness in all the key industries that BHFC serves. Maintain S/A revenue/EBITDA/PAT declined ~47%/69%/99% to ~INR8.8b/INR1.5b/INR17m YoY. While tonnage declined 36% YoY, realizations dropped 18% YoY (-4% QoQ) to INR219.3k/t (v/s est. Auto segment revenues declined ~43% YoY, impacted by the decline across CVs/PVs 57%/19% in domestic and ~39%/18% in exports. Non-auto segment revenue declined ~56% YoY, impacted by exports plunging ~68% and domestic revenue plummeting ~38% decline. EBITDA margins declined 1,220bp YoY (-540bp QoQ) to 16.