Bharat Forge (BFL) has restructured its international business to realign its cost structures to demand. The company’s new non-auto facilities will come online from this year. Commercial production will also begin.
BFL expects non-automotive business to contribute 40% to revenues by 2012. ?The company undertook manpower restructuring of various international operations and also transferred the business and assets of the Scottish operations to its Swedish facility, Bharat Forge Kilsta. The rationalisation was to the extent of 40%,? Baba Kalyani, CMD, BFL said. The company has repaid $ 131.5 million FCCB including redemption premium including the principal of $ 102.3 million, during the year. Subsequent to the FCCB redemption in the last week of April 2010, BFL raised around Rs 626 crore, including warrants through the QIP route. This has reduced BFL?s debt equity ratio net of cash to 0.76, he added. These funds will be used for investment in new business forays, he said.
On the non-automotive business, Kalyani said the company had won new contracts across sectors focused on shale and offshore drilling related activities in the oil and gas space, orders for critical components in both thermal and nuclear power and supply of components for railways. ?The order pipeline on the non-auto front is increasing and we plan to increase capacities at the Baramati plant which should reach 100% capacity utilisation levels soon,? he said. The company?s non-automotive business caters to infrastructure development. The company has formed two separate JVs with Alstom and NTPC. Kalyani added the North American market was expected to recover by year end, while European automotive markets were still lagging behind.
Profit surges on ops rejig
Pune, Jul 26: Bharat Forge has reported a rise in its net profit to Rs 59.4 crore for the quarter ended June ended 30, 2010, as against Rs 0.96 crore for the corresponding quarter last year. The company sales rose by 76% to Rs 630 crore for the first quarter of this fiscal as compared to Rs 359 crore from the same quarter previous year. Profit before tax (PBT) also increased to Rs 59.43 crore in the quarter as against Rs 1.45 crore in the same quarter last year.
Revenues of the wholly-owned subsidiaries surged by 51.9% to Rs 372 crore. Bharat Forge CMD Baba Kalyani said, ?The turnaround was due to restructuring of operations which were carried out last year.? Exports for the quarter rose by 63.2% y-o-y to touch Rs 232.9 crore.