The adverse effect of lower demand, both from the auto and non-auto sectors, across geographies has impacted the profit of Bharat Forge (BFL) which has posted a profit after tax (PAT) of Rs 47.5 crore during Q3 13 versus Rs 103 crore in the same quarter of 2011. This translates into a decline of approximately 54 per cent year-on-year.

A 33 per cent drop in export revenue reflected in income from operations that stood at 673 crores versus Rs 941 crore in Q3 12, representing a dip of 28.5 per cent YoY. Domestic revenues declined by 24 per cent to Rs 362 crore on the back of a continued slump in automotive demand and drop in sale of components to the industrial sectors in India.

The lower demand coupled with inventory de-stocking at the OEM level led to a decrease in capacity utilisation in Q3 FY13, and BFL undertook manufacturing cuts to reduce inventories and match production levels with existing demand.

Standalone EBITDA declined by 42 per cent to Rs 139 crore while PBT before exchange gain/ (loss) and exceptional item decreased by 60.6 per cent to Rs 64 crore.

The non-automotive business, which has been a key growth driver over the past two-three years, was also impacted by a reduction in demand globally for infrastructure related products and solutions.

B. N. Kalyani, Chairman & Managing Director said, “On the back of continued weak and uncertain macroeconomic fundamentals globally, the company witnessed a sharp drop in demand across all sectors, customers and geographies in the export market in addition to the continued weakness in the domestic market.”

The company has initiated measures aimed at tight cost control and productivity improvements, and expects demand in the fourth quarter to continue at the same level as the previous quarter but still lower year-over-year, he added.

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