An employee uses a cutting torch at a factory. (Photographer: Dhiraj Singh/Bloomberg)

Bharat Forge Expects Growth Momentum To Continue This Year

Bharat Forge Ltd. expects to maintain the same growth momentum this financial year as it witnessed in 2016-17.

The company reported a net profit of Rs 100 crore during the January-March period, a decline of 51.8 percent compared to the year-ago period, according to its stock exchange filing. That’s lower than the Rs 244-crore consensus estimate of analysts tracked by Bloomberg as it reported a one-time loss of Rs 113 crore.

The auto components manufacturer will spend Rs 609 crore in the current financial year, Amit Kalyani, executive director of the company, told BloombergQuint in a post-earnings interaction.

Key earnings highlights (Q4, YoY):

  • Revenue up 30.3 percent at Rs 1,466 crore.
  • Ebitda up 30.6 percent at Rs 1,480 crore.
  • Margin at 28.5 percent versus 28.4 percent.

Key Highlights from the conversation:

On Revenue:

  • March quarter was driven by the growth in domestic and exports segment.
  • There has been an impact of steel price increase which has some pass through. It has some inflationary effect on the topline.

On Profit:

  • Foreign exchange losses and project expense provisions have impacted profits.
  • There was an exceptional loss this quarter relative to last quarter due to swing in exchange which is notional.
  • The company made a provision on the project expenses we had undertaken in about five years ago when we had invested in new businesses. But we have stopped that.

On Crude Oil Price Rally:

  • The company expects the oil and gas business to be buoyant and give more opportunities for growth.

On Business Expansion:

  • The company has set-up R&D business to grow their electric vehicle business.
  • Higher steel prices will be passed on to customers.
  • Industrial business growth to remain strong. The company is witnessing strong demand on commercial vehicle sector both in India and U.S.
  • See green shoots in the defence business.

Shares of the company today ended 1.9 percent lower at Rs 680.95 on the NSE.