"The union Budget’s focus on infrastructure development along with the vehicle scrapping policy bodes well for both the CV and industrial sector growth over the medium term," Kalyani said.
Bharat Forge reported a loss of Rs 210.44 crore for the December 2020 quarter compared to a profit of Rs 40.40 crore in the comparable quarter in the previous year. The company said it had to provide Rs 274.26 crore during the quarter towards a fine imposed on the company’s German subsidiary in an anti-trust case settlement by Germany’s competition regulator. A fine of €32 million was imposed in December 2020 and has to be paid over the next five years.
In addition, the company also had to spend Rs 5.47 crore on VRS for employees at Mundhwa and Satara plants and around Rs 19.71 crore for manpower optimisation in overseas subsidiaries, taking total exceptional cost to Rs 299.44 crore. The company’s consolidated revenue was down 6% y-o-y to Rs 1,723 crore in the December quarter. Profit before tax and exceptional items was at Rs 127.23 crore during the quarter compared to Rs 86.11 crore in the Q3FY20.
BN Kalyani, the chairman and managing director of Bharat Forge, said demand was expected to remain robust across all key geographies and sectors and in the the export market, they were witnessing demand recovery across sectors.
“The union Budget’s focus on infrastructure development along with the vehicle scrapping policy bodes well for both the CV and industrial sector growth over the medium term,” Kalyani said.
The government’s Production Linked Incentive scheme coupled with AtmaNirbharta would open up new growth opportunities for the company, he said.
The company saw a recovery in the automotive business with demand for heavy trucks in Europe and North America recovering faster than expected.
Increased infrastructure spending, mobilisation of construction projects and mining activities in the domestic market is expected to improve fleet utilisation and M&HCV demand further in the coming quarters. The industrial business, barring the oil and gas sector, showed a sequential as well as y-o-y growth during the third quarter. There was a 95% reduction in the oil and gas business.
Lightweighting of components, aluminium forging, defence and electric vehicle components would be drivers of growth for the company in the next three to five years. New facilities coming up in the US and Europe are expected to start production in the first half of FY22.