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May 28, 2012, 08.47 PM IST
The auto components leader Bharat Forge today said higher tax and raw material costs and losses in the US operations, pulled its March quarter standalone net down by a whopping 45.23% to Rs 55.12 crore.
Bharat Forge chairman and managing director Baba N Kalyani, however, struck an optimistic note, saying the company expects better growth in the current fiscal, primarily driven by good growth in its non-auto business.
"I expect to see good growth on a year-on-year basis largely based on our non-auto business, which I think will grow even this year," Kalyani told reporters after the announcing financial results. Total standalone income stood at Rs 977.15 crore for the March quarter as against Rs 821.27 crore a year ago, he said.
However, consolidated net profit for the full year jumped nearly 42% to Rs 420.22 crore from Rs 296.85 crore for the year ago period, while total income rose to Rs 6,279.06 crore as against Rs 5,086.95 crore.
Kalyanai said he is looking at restructuring company's US unit, Bharat Forge America, which will see the Pune-based company stopping any further investment in the US unit. Bharat Forge America is a preferred supplier of forgings for critical safety components in chassis and engines.
"We will look how to restructure it," Kalyani said adding the company made a Rs 70.4 crore provision in the reporting quarter on account of impairment of investments in the US operations. The industry is seeing lot of volatility in the market on account of European financial crisis and domestic economy, besides Chinese automotive market is on a downturn at least for the first two quarters this year, he said.
"But the good news is that all our businesses in Europe supply largely to Germany, manly into high-end cars and the Scandinavian region which are still running quite well, ' he said. "Apart from South America and Brazil, we are actively participating in Japanese markets also, where we are supplying to OEMs," he said.
"We have a fairly significant business in Japan. We never had a business with Japanese OEM before. There is a good opportunity for us there now," he said. The company is increasing penetration in the passenger vehicle business both in Europe and North America. North America is going to be a very strong market going forward, Kalyani said adding, there are clear signs of passenger car business coming back from the lows of below 10 million to around 13-14 million.
After the results, the company shares rose 3% to Rs 318.60 on the BSE, whose benchmark rose over 1.23%.
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