Bharat Forge Sees Chip Shortage Impact In Q3
India's largest exporter of automotive parts expects the global shortage of semiconductor chips to affect its third-quarter business.
“There's rationing taking place at every OEM (original equipment maker) customer," Amit Kalyani, deputy managing director of Bharat Forge Ltd., told BloombergQuint in an interview.
Automakers are choosing to build fewer vehicles with higher profit margins, he said. "Luckily enough, we're on a lot of those platforms but volumes are definitely impacted."
“It's not going to be drastic but there will be some amount of impact,” Kalyani said. The automobile industry, he said, isn't out of the woods yet and the situation should start easing after December.
Bharat Forge's profit nearly doubled sequentially to Rs 271 crore in the quarter ended September, according to its exchange filing. Revenue rose 13% to Rs 2,385 crore.
Kalyani, however, said as demand remains strong, waiting periods are long. “As and when the chip shortage sorts itself out, it should provide a big stimulus and boost to our growth.”
The company is seeing strong demand in the international commercial vehicle market, which is expected to sustain with increased spends on infrastructure and fleet replacements in the U.S. and Europe.
Watch the full conversation here