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Bharat Forge Q2 net inches up; sees demand trend flat in H2

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New Delhi: Auto component major Bharat Forge on Thursday reported a marginal growth in its standalone net profit at Rs 175.06 crore for the second quarter ended September 30.

The Pune-based firm had clocked a net profit of Rs 174.49 crore in the year-ago period, it said in a regulatory filing.

On outlook, the firm expects the demand trend to be similar to the first half of the financial year 2016.

Total standalone income of the company fell by 2% to Rs 1,116.82 crore in the September quarter from Rs 1,138.27 crore during the same quarter of 2014-15 on account of subdued industrial sentiment, it added.

Total expenses of the company, which is part of the $2.5-billion Kalyani Group, were lower at Rs 860.67 crore from Rs 879.89 crore during the quarter under review.

Bharat Forge Chairman B N Kalyani said: “Sales development during the quarter was lower than expected due to high volatility across multiple sectors and geographies, particularly all industrial sectors.”

The firm said downturn in commodity prices impacted the revenue from industrial segment, which mainly impacted the firm’s revenues. However, performance of the domestic market in terms of revenue was “fairly strong”.

He attributed the growth in profit to the firm’s focus on asset light model coupled with fiscal prudence aimed at becoming a net debt free company and coast rationalisation.

“Passenger vehicle component business continues to progress well as evident from more than doubling of export sales in that segment,” he added.

Its revenues from the automotive segment in the export markets grew 15% year-on-year.

“Global macro uncertainty and its adverse impact on demand in the industrial sector will be compensated to some extent by positive automotive demand and ramp up of passenger vehicles business,” he added.

Reacting to the earnings numbers Bharat Forge’s shares settled at Rs 812.10, down 6.38% on BSE.

PTI