Bharat Forge reports profit of Rs 271 crore on demand revival

By: |
November 13, 2021 6:30 AM

There was a 63% growth in revenue from the industrial business driven by supply of forged aluminium cylinders used for delivering medical grade oxygen. This product developed and manufactured in three months brought in an additional revenue of Rs 69 crore, the company said.

The company said while there was a strong recovery in the domestic automotive business as well as industrial segment, there were headwinds in the form of input cost pressure, high diesel prices and disruptions such as shift towards electric vehicles (EV).The company said while there was a strong recovery in the domestic automotive business as well as industrial segment, there were headwinds in the form of input cost pressure, high diesel prices and disruptions such as shift towards electric vehicles (EV).

Bharat Forge on Friday reported a consolidated profit after tax of Rs 271 crore for the September quarter. The company incurred a net loss of Rs 1.8 crore in the second quarter of FY21. Its revenue grew by 73.4% year-on-year (YoY) to Rs 2,385.60 crore in the September quarter. Operating income increased 188% to Rs 476.7 crore YoY. Ebitda margin improved to 20% in Q2FY22 from 12% in Q2FY21.

BN Kalyani, chairman & MD, Bharat Forge, said demand continued to remain robust across most end markets and revenues grew because of a sharp pick-up in the domestic market. However, latter part of the quarter was impacted by semi-conductor shortage and logistics-related issues, he said.

Kalyani expected demand to be robust across segments during the third quarter of FY22. But this would depend on the semiconductor and other supply chain issues that would weigh in on OEM’s ability to produce. The company’s 75% exposure to the domestic markets and industrial export segment would continue to do well, while the automotive export business would see a decline, Kalyani said.

The company said while there was a strong recovery in the domestic automotive business as well as industrial segment, there were headwinds in the form of input cost pressure, high diesel prices and disruptions such as shift towards electric vehicles (EV).

The company’s investments in an EV start-up and significant R&D work focused on e-mobility has put the company in a sweet spot. The company will have solutions ranging from components to sub systems and systems across the full spectrum right from 2W to commercial vehicles.

There was a 63% growth in revenue from the industrial business driven by supply of forged aluminium cylinders used for delivering medical grade oxygen. This product developed and manufactured in three months brought in an additional revenue of Rs 69 crore, the company said.

The international automotive business was disrupted due to the semiconductor shortage and logistics issues with both commercial vehicle and passenger vehicles getting impacted. But the international industrial business has started to recover, driven by the oil & gas space.

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