Increased capacity by 28%: Bharat Seats

Auto component maker Bharat Seats , a joint venture company of Maruti Udyog Limited and Relans, has seen a fairly decent jump in its stock performance in the recent times. From October 8, the stock has zoomed up 58% in last 20 days, which to some extent can be explained by the stellar set of numbers.  

The company’s Q2 FY10 sales stood at Rs 84 crore as against Rs 51.2 crore in the same period last year. Profit after tax (PAT) stood at Rs 1.34 crore as compared to Rs 6.5 lakh. Operating margins increased to 2.75%.

Narinder Dev Relan, Chairman, Bharat Seats, attributes the good performance to the increasing order inflow from Maruti, which is its biggest client. The company, he added, has increased its capacity by 28%.

Here is a verbatim transcript of the exclusive interview with Narinder Dev Relan on CNBC-TV18. Also watch the accompanying video.

Q: Take us through your numbers. What explains this fairly substantial growth in your sales from 51 crore to 84 crore but more importantly in your profit 6 lakh to 1.3 crore. What went so right for you?
A: We are making seats for Maruti, total seating system and Maruti has been increasing their sales tremendously and they have given us a good share and we are making seats for their motorcycles division for Suzuki also.
Q: How much of the business comes from Maruti, how much from Suzuki and how much from Indian railways because you supply seats for railways also?
A: We are just starting with Indian railways. We have just got a trial order and as soon as that approves that will have an additional benefit. There is not much to say now. As a matter of fact, we are getting good profit for four sitters and two sitters. Two sitters is about 150% more than last year and four wheeler is 28% more than last year. We are also doing well in carpet.
Q: Are you impacted by the recent agitation at Gurgaon?
A: We have had absolutely no effect in our factory. We are going on with our production regularly.
Q: Do you think you can maintain this 85 crore revenue rate for the other quarters as well or do you expect to do even better?
A: It would be much better because more new vehicles are coming for Maruti and we are getting orders for them and in our own system we have got research and development (R&D) centre where we are developing our own seat sets also. 
Q: Are you producing to capacity, are you increasing your capacity. At the moment what is it, 100% or less?
A: We are always increasing our capacity.
Q: By how much are you increasing your capacity?
A: We have already increased our capacity by 28% and now are manufacturing 1,700 seat sets for four-wheeler alone.