Quarterly Results: Bharat Forge net down 71.3% to Rs 70.30 crore

Forging and auto component major, Bharat Forge reported 71.3% year-on-year decline in standalone profits to Rs 70.30 crore for the September quarter. Revenue for the quarter was down 30% year-on-year to Rs 881.50 crore with a fall in both domestic as well as export sales, thanks to the pandemic. The cyclical downturn in the commercial vehicle sector also contributed to the decline in revenues, the company said.

Bharat Forge’s domestic revenues fell 9.9% year-on-year to Rs 403.6 crore, while exports declined by 40.2% year-on-year to Rs 462.3 crore.

BN Kalyani, CMD, Bharat Forge, said on the export front, there were clear signs of demand improvement, especially in the commercial vehicle segment, but the second wave of Covid cases in Europe & North America and its potential impact on demand was something they had to keep track of. Despite governmental assistance in Europe and North America, the overseas manufacturing operations reported Ebitda loss of Rs 33.40 crore, Kalyani said.

The outlook in the domestic market was positive but was subject to continued momentum on the investment in infrastructure, he said. The domestic automotive industry, that was severely impacted by the nationwide lockdown imposed in the first quarter of FY21, has started showing some signs of recovery from the months of July and August, the company said.

There was a rise in demand in the LCV (light commercial vehicle) and ICV but not as much in the M&HCV (medium and heavy commercial vehicle) segment. The M&HCV production was down 41% in Q2FY2. The company said a full-fledged recovery in M&HCV sales was unlikely in the near term and any meaningful recovery could be only expected by FY22 onwards.

In the industrial business, the oil & gas sector has been crippled with no hopes of recovery in the near term while the aerospace sector is facing severe headwinds, the company said. The company’s total shipments in the September quarter fell 23.8% year-on-year to 40,775 tonne.