Margins to improve due to better product mix: Bharat Forge

Bharat Forge has announced its results for the quarter ended December 31, 2011. The company posted a net profit of Rs 103.13 crore for the quarter ended December 31, 2011 as compared to Rs 82.61 crore for the quarter ended December 31, 2010.

Total Income has increased from Rs 789.52 crore for the quarter ended December 31, 2010 to Rs 944.490 million for the quarter ended December 31, 2011.
Baba Kalyani, the chairman and managing director, Bharat Forge tells CNBC-TV18 that the demand has been strong this quarter. He says a healthy product mix will result in further improvement in the margins.
From the US, he expects a slow and steady growth going ahead. However, its European business is expected to report flat growth in 2012. Kalyani also elaborated that the CV business is expected to grow 16-18% from current levels. Below is an edited transcript. Watch the accompanying video for more. Q: What went right in this quarter? Was demand better than expected? Take us through the highlights?
A: Demand was good. Bharat Forge as a company has got to a level in terms of size, scale and relationships. We have some very strong relationships with clients around the world and they are growing and continue to grow. We have added a large industrial segment to our portfolio which is a very natural part of our growth strategy which is beginning to grow. You are beginning to see a larger penetration in the markets, new customers coming in and the growth really coming out of that. Q: Your raw materials to sales have actually declined this time around. Do you think raw material costs have peaked out and you could have subdued costs going forward?
A: The large reason why the raw material numbers look lower is our value addition has gone up. In terms of percentage sales, we are doing more and more machining, more and more value addition for products that we supply, so that