Last Updated : Feb 08, 2017 01:28 PM IST | Source: Moneycontrol.com

Bharat Forge Q3 profit dips 21%, sees recovery in export markets

"Despite a weak demand environment in domestic market and a slow global recovery, the company posted topline growth in the quarter driven by continued focus on diversification and increasing market share across segments, while profitability improved on a sequential basis despite input cost pressure," Baba Kalyani, CMD said.

 
 
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Moneycontrol Bureau


Bharat Forge, the world's largest forging company, said profit in October-December quarter fell by 21.5 percent year-on-year to Rs 128.6 crore but sequentially grew by 1.35 percent.


Revenue during the quarter declined 10.7 percent to Rs 990 crore compared with Rs 1,108.5 crore in year-ago quarter, impacted by exports. However, on sequential basis, the same increased 5.6 percent.

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"Despite a weak demand environment in domestic market and a slow global recovery, the company posted topline growth in the quarter driven by continued focus on diversification and increasing market share across segments, while profitability improved on a sequential basis despite input cost pressure," Baba Kalyani, CMD said.


Export revenue declined 23.9 percent (up 7.5 percent QoQ) to Rs 485.2 crore on year-on-year basis but domestic business grew by 7.3 percent (up 3.2 percent QoQ) to Rs 480.5 crore in Q3.


Bharat Forge said shipment fell 7.2 percent year-on-year to 47,068 tonnes but grew by 1.9 percent sequentially.


Looking ahead in to Q4FY17, Kalyani expects positive demand condition in India driven by higher commercial vehicle volumes as pre buy ahead of new emission norms.


He also expects continued recovery in export markets driven by industrial and passenger vehicle sector. The performance of class 8 trucks volume in North America is showing some signs of improvement currently in terms of order intake.


North America Class 8 truck orders in January increased 20 percent YoY to 21,600 units, according to data available with FTR Transport Intelligence. On month-on-month basis, the growth was only 1.76 percent. About 30 percent of Bharat Forge revenue comes from North America Class 8 trucks.


It was mixed set of earnings from the company. Profit was expected at Rs 137 crore on revenue of Rs 951.7 crore and operating profit was estimated at Rs 270 crore with margin at 28.4 percent for the quarter, according to analysts polled by CNBC-TV18.


Operating profit dropped 20.6 percent (up 5.2 percent sequentially) to Rs 260.6 crore and margin contracted by 330 basis points (down 16 bps QoQ) to 26.3 percent compared with year-ago quarter.

At 13:14 hours IST, the stock was quoting at Rs 982.00, up Rs 1.25, or 0.13 percent on the BSE.

First Published on Feb 8, 2017 12:59 pm
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