During the quarter, the company secured new business worth $30 million for automotive application across domestic & export markets
Bharat Forge reported 28 percent fall in consolidated June quarter profit, dragged by subdued demand in the domestic market and inventory destocking in export oil & gas business.
Profit declined to Rs 171.92 crore in Q1 from Rs 238.75 crore in the same period last year. Revenue fell 3.55 percent year-on-year to Rs 23,278.56 crore in the quarter ended June 2019.
"Q1 FY20 was a challenging quarter with negative demand development in the domestic market across segments, with OEM's focussed on correcting inventory levels across the value chain. This coupled with the inventory destocking in the export oil & gas business, had an adverse impact on performance," B N Kalyani, CMD, Bharat Forge said.
Bharat Forge in its BSE filing said shipment tonnage was down by 8.9 percent to Rs 6,087.4 crore compared to year-ago period.
During the quarter, the company secured new business worth $30 million for automotive application across domestic & export markets.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 14.9 percent YoY to Rs 410.5 crore and margin contracted 240bps YoY to 17.6 percent in the quarter ended June 2019.
Numbers were far lower than analyst expectations. Profit was estimated at Rs 306.9 crore on revenue of Rs 2,490 crore and EBITDA was expected at Rs 550.4 crore with margin at 22.1 percent for the quarter, according to a poll of analysts conducted by CNBC-TV18.
"While the sales development through the course of FY20 is dependent on end markets, our focus will be on aggressively cutting cost, accelerating new product development through our own R&D, free cash generation and strengthening the balance sheet," Kalyani said.
Tax expenses fell by 25 percent to Rs 94.1 crore compared to year-ago.The stock was quoting at Rs 408.65, down Rs 18.20, or 4.26 percent on the BSE at 1032 hours IST.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.