Auto components major Bharat Forge on Wednesday reported a consolidated net loss of Rs 1.32 crore in the second quarter ended September 30 hit by the coronavirus pandemic induced disruptions. The company had posted a consolidated net profit of Rs 205.49 crore in the same quarter last fiscal, Bharat Forge said in a regulatory filing.
Consolidated revenue from operations during the period under review stood at Rs 1,376.09 crore as against Rs 2,155.20 crore in the year-ago period, it added.
Commenting on the performance, Bharat Forge Chairman and Managing Director BN Kalyani said, "The consolidated quarterly weak financials reflect the full impact of COVID-19 lockdown on our overseas manufacturing operations in Europe and North America during April-June period. Despite governmental assistance, they recorded an EBITDA loss of Rs 334 million."
He further said the company's restructuring of both the Indian and international operations to enhance sustainability continues. "We are focusing on incorporating more digital solutions in manufacturing and we also are making steady progress on further optimisation of our fixed cost," Kalyani added.
Bharat Forge said the domestic automotive industry that was severely impacted by the nationwide lockdown imposed in the first quarter of FY 2021, started showing some signs of recovery from the months of July and August.
As the economy started opening up again in a phased manner and infrastructure projects got on track, fleet utilisation improved sequentially resulting in firming up of freight rates, it stated.
"As a result, every segment of the commercial vehicle (CV) industry witnessed a rise in demand, but demand was more robust on LCV and ICV as compared to the M&HCV segment. The M&HCV production was down 41 per cent in Q2 FY21 compared to the same period last year," it added.
As for the international automotive business, the company said North American and European heavy truck production recovered quicker than expected from the lows of April and May as lockdowns were eased and economies worldwide started opening up.
Demand in both the markets improved gradually over the course of the quarter on the back of increased freight volumes, higher freight rates and some pent-up replacement cycle demand. It is expected to remain stable at the present range in the near term with buyer confidence increasing as the economy recovers and generates ample freight.
On the outlook, he said, "Looking ahead to demand for the coming quarter, the outlook for domestic market is positive but is subject to continued momentum on the investment in infrastructure."
On the export front, Kalyani said there are clear signs of demand improvement, especially in the commercial vehicle segment, but the second wave of COVID-19 cases in Europe and North America and its potential impact on demand is something to keep track of.
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