Bharat Forge holds margins flat despite revenue drop

Our Bureau New Delhi | Updated on March 12, 2018

Bharat Forge posted a 13 per cent drop in net profit at Rs 91 crore (Rs 105 cr) for the quarter ended June 30.

Revenues were 16 per cent down at Rs 792 crore (Rs 936 crore).

However, softening of commodity prices and cost reduction initiatives by the company led to EBITDA (earnings before interest, tax, depreciation and amortisation) margins remaining almost flat at 24.8 per cent (25.1 per cent).

The non-auto segment of its business for the quarter logged a growth of 27 per cent at Rs 280 crore, which the company said was primarily driven by inventory impact getting over in the export market

“While we are witnessing a demand decline in India, profitability is improving due to strong execution and improving demand from export markets. Despite the weak environment, we continue to win new business in passenger vehicle, utility vehicles and industrial segments and simultaneously increase in market share,” said B.N. Kalyani, Chairman, Bharat Forge.

Yaresh Kothari, Research Analyst on the Automobile sector at Angel broking, said, “Bharat Forge reported strong results for 1QFY2014 beating consensus as well as our estimates by a wide margin. The performance was driven by sequential improvement in volumes (up 11.2 per cent) driven by export markets and better-than-expected EBITDA margins (at 24.8 per cent, up 376 basis points quarter-on-quarter) on the back of cost reduction initiatives undertaken in the past two quarters.”

On Thursday, the company scrip was up 16.62 per cent at Rs 231.20 on BSE.

Published on August 08, 2013

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