Bharat Forge reports a robust growth in FY2018, on the back of a strong performance in domestic and international markets. The company is also banking on new products to increase its product content per vehicle.
Bharat Forge, the flagship company of the Kalyani Group, has announced revenue of Rs 5,492 crore for the fiscal 2018, an increase of 32 percent YoY. The company states that the growth was on the back of underlying demand across sectors and geographies. The PAT for the year stood at Rs 707 crore, up 21 percent.
For Q4 FY2018 revenue stood at Rs 1,501 crore, up 24.56 percent YoY, PAT at Rs 100 crore, down 51.69 percent. Baba N Kalyani, chairman and managing director, Bharat Forge, said, “FY18 has been a record year for the company with revenue growth surpassing underlying demand growth across sectors and geographies. In FY18, the company registered revenue growth of 38 percent, for Q4FY2018, exports grew by 36 percent and domestic revenues grew by 23 percent YoY. We continued to strengthen the balance sheet with all key financial ratios witnessing a sharp improvement compared to FY2017.”
“In FY2018, the company has secured long term orders of Rs 700 crore across various segments and geographies. Over the past two years, new business wins of Rs 1,500 crores have been secured, 90 percent of the wins being from passenger vehicles and industrial segment. This, coupled with the ongoing work on new product development, is creating a robust product pipeline and will enable further de-risking of revenue stream in the coming years,” added Kalyani.
He further stated that the company is undertaking an expansion of its forging and machining capacity at the Baramati facility by investing Rs 400 crore. This would cater to the requirements from the automotive and industrial segments globally. He states that this investment along with its Greenfield facility at Nellore will put it on a strong organic growth trajectory.
Kalyani mentions that the ongoing investments coupled with the success of new products and increasing traction on various ‘Make in India’ initiatives will put Bharat Forge on the cusp of another transformation. He states that this phase will see the company address opportunities in electric vehicles and enhance its product portfolio in automotive and industrial segment.
The commercial vehicle business saw growth of 29 percent, and it further expects a gradual build up from the BS-VI emission norm changes (to be effective from 1st April 2020), replacement demand, the government’s push towards infrastructure development, restriction on overloading of trucks, increase in the rate of road construction and increased mining activities to keep the demand from the M&HCV segment positive for FY 2019.
It states that the new product from the company’s stable are finding increased acceptance in the PV market and helped it increase its share with customers. The company claims revenues from the passenger car segment in FY2018 saw strong growth of 38.5 percent as compared to FY2017.
The company’s focus on increasing content per vehicle and increasing share with customers is yielding good results. Revenues from the heavy commercial vehicle business in FY 2018 showed growth of 29.6 percent as compared to FY2017, which it states to have outperformed the underlying markets. It states that the PV demand continues to be robust globally especially in Europe and US, its key markets, and the revenue in this segment grew by 22.7 percent in FY2018 as compared to FY 2017.
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