A strong growth in domestic automobile sales and pick-up in sales in Europe and the U.S. saw Bharat Forge, leading manufacturer of components for the automotive and industrial sectors, report a 64 per cent rise in its standalone net profit at Rs.100. crore for the fourth quarter ended March 31, 2011, against Rs.61.26 crore in the same quarter in the previous year. This is the first time the company crossed the Rs.100-crore profit mark in a quarter.
Net sales during the quarter were up 45.4 per cent at Rs.796.17 crore (Rs.547.75 crore) with domestic sales rising by 34 per cent to Rs.478.32 crore and sales outside India up 63.5 per cent to Rs.358.17 crore.
For the full year, the company reported a 70 per cent higher net profit of Rs.310.57 crore (Rs.127.04 crore) on sales of Rs.2,858.92 crore (Rs.1,814 crore). Significantly, on a consolidated basis, the company turned around its performance during the year reporting a net profit of Rs.296.60 crore after posting a loss of Rs.76.44 crore in 2009-10.
Its net sales were up 52 per cent at Rs.4,998.87 crore (Rs.3,285.2 crore). The non-auto business has become one of the major drivers of Bharat Forge's business and during the year, it became the single largest business segment of its Indian operations. The company expects the non-automotive business to continue to be strong with tremendous traction from global clients and new order wins and its contribution to the standalone business increased to 37 per cent (30 per cent).
The company maintained its operating margins at 25.5 per cent (24.9 per cent) for the year and 24.2 per cent for the fourth quarter in spite of raw material costs rising by 60 per cent during the year to Rs.2,494 crore. The gross profit was up 148 per cent at Rs.448 crore.
“Fiscal 2011 saw the company come back on the growth path with strong momentum for the Indian operations within India and its exports business, and significant improvement in performance of the overseas subsidiaries,'' said Chairman and Managing Director Baba Kalyani. “Despite some signs of softness in the domestic automotive market, we are quite confident of continuing the growth trajectory in the coming year on the back of strong global demand,'' he added.
BFL's Indian operations saw a strong performance across sectors and geographies during the year with domestic revenues growing 50 per cent at Rs.1,728 crore while exports grew 72.6 per cent at Rs.1,219 crore on the back of recovery of the commercial vehicle market in Europe and North America. To cater to the growing demand, Bharat Forge is increasing the forging capacity by 15 per cent by de-bottlenecking existing lines and setting up a heavy press line. It is also expanding machining capacity and will spend around Rs.250 crore in the next two years for debottlenecking and capacity expansion.