The Hindu Business Line : Bharat Forge `on track' to record $ 1 b global revenue

The company is confident that as it reaches forging capacity of 2.40 lakh tones per annum (tpa), its profit growth would outpace revenue growth. It has also identified non-automotive business as a future growth driver.

In the `First quarter of the financial year 2007 Earnings Update' posted on the company's Web site, BFL said that its capacity expansion programme has entered the last phase of execution and the entire forging capacity expansion would be completed by September and the crankshaft machining capacity increase would be completed by December. The effective capacity would be fully available for starting trial production by the third quarter of the financial year 2007. BFL said that during 2004-05 financial year, the company had forging capacity of 1.20 lakh tpa and this would double to 2.40 lakh tpa by the end of the current financial year. The full benefit of the increase in capacity would be felt during 2007-08. Referring to the future outlook, BFL stated that it was `on track' with its initial objective of achieving global revenue of $1 billion by the financial year 2008. In the first quarter of this year, the company's combined revenue was over Rs 10 billion (about $220 million).

It was simultaneously working on its `Vision beyond $1 billion' and has identified non-automotive business as a `key growth driver' and said the company would aggressively pursue this opportunity. The non-automotive businesses the company has identified are conventional and non-conventional energy sector, hydrocarbon exploration sector, mining and metals and aerospace sector.

BFL had identified effective ramp up of the capacity established in India, time-bound improvement in the operations and margins of the global subsidiaries and significant operating improvement in the China operations as the clear drivers for the next three to four years.

Chinese venture

On the China operations, BFL said that the during the first quarter of current fiscal, the joint venture with FAW, the largest truck and car producer of China, had commenced operations. BFL has a long-term strategy for China.

In the first phase, it would focus on enhancing the operating efficiency of the plant, inculcate significant technology inputs to increase productivity and so on. In the next phase, BFL would focus on China operations to establish it as a `global competitive cost manufacturing hub' for meeting the requirements of the global OEM customers, the company said.

The shares of Bharat Forge closed at Rs 305.80 on the BSE and at Rs 305.40 on the NSE on Thursday.

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