Bharat Forge Limited (BFL) today announced strong results for the third quarter ended December 2003.
BFL has reported an increase of 54.54 % in net profit for the quarter ended December 2003 to Rs. 33.01 crore as compared to Rs 21.36 over the corresponding quarter of the previous year. Total income rose 26.94% to Rs 231 crores, driven by robust domestic sales at Rs 145.86 crore, a growth of 37.79%. Exports registered an increase of 13.59 % to Rs 84.83 crore as compared to Rs 74.68 crore over the corresponding quarter. EPS for the quarter is at Rs. 8.54 v/s Rs 5.45 in the corresponding period.
The company also announced that it has recently won two major contracts for machined heavy-duty diesel engine crankshafts from leading global engine manufacturers.
Mr. B. N. Kalyani, Chairman & Managing Director, Bharat Forge Limited, said, " The results of last quarter are a reflection of robust growth in domestic demand and our continued thrust in the export market coupled with stringent cost control measures implemented by us. Our performance in domestic market is an indication of our strengthening market position. While our existing exports are looking healthy, our core focus for the near future is on passenger car components, and machined diesel engine crankshafts which will be a major driver on the exports front. CDP acquisition has given tremendous leverage to BFL in the European markets as well as passenger car segment."
According to the company's unaudited results for the quarter approved by the Board of Directors on January 19, 2004, following are the financial highlights:
Domestic market of BFL has grown by 22.3 % over Q1FY03 to Rs 121 crore. The domestic economy has shown buoyancy with the commercial vehicles segment registering close to 15% growth during the April-June quarter.
BFL’s Rights Issue for part funding the expansion program of Rs 350 crore is slated to open in the second week of August 2004.
According to the company’s Unaudited results for the quarter approved by the Board of Directors on 27 July 2004, following are the financial highlights :
Particulars |
Quarter Ended 31/12/03 |
Quarter Ended 31/12/02 |
% Change |
Nine-month Ended 31/12/03 |
Nine-month Ended 31/12/02 |
% Change |
March 2003 |
Total Income |
231.02 |
181.99 |
26.94 |
659.47 |
482.08 |
36.80 |
695.50 |
Domestic (net of excise) |
145.86 |
105.86 |
37.79 |
403.68 |
289.57 |
39.41 |
417.53 |
Exports |
84.83 |
74.68 |
13.59 |
247.84 |
190.72 |
29.95 |
271.69 |
EBIDTAMargins |
28.98% |
27.57% |
1.41 |
28.51% |
28.31% |
0.20 |
28.16 |
PBT |
47.62 |
30.32 |
57.06 |
128.41 |
74.30 |
72.83 |
113.26 |
PAT |
33.01 |
21.36 |
54.54 |
88.67 |
51.08 |
73.59 |
81.09 |
EPS Rs |
8.54 |
5.45 |
-- |
22.88 |
12.99 |
-- |
20.71 |
During the quarter under review BFL continued to report robust performance with sales and profitability hitting an all time high. The company witnessed a dramatic rise in the domestic business, which, coupled with solid export business led to capacity being almost fully utilized. As a result of the higher than expected growth in the domestic market, BFL has ramped up production to ensure that domestic customer requirements are fully met. The company's domestic sales grew by a huge 37.79 % during the quarter to reach Rs 146 crore. Exports have shown a growth of 13.59%. BFL's leadership and technological capabilities has led to a strengthened position in the domestic market.
BFL has exhibited tight cost control, which is reflected in the lower employee cost to sales at 5.66% as compared to 6.31% in the corresponding quarter of last year. Similarly, Interest cost at 3.21% of sales as compared to 5.12% has shown a marked decline during the same period. A strict control on costs and an efficient management coupled with economies of scale has resulted in the OPM moving up by 141 bps to 28.98 % inspite of rising input costs during the third quarter.
Nine Months FY04 Performance
During the Nine months of FY04, total income rose to Rs 659.47 crore a rise of 36.80%. A robust jump on both domestic and exports has led to a substantial rise in Sales. This coupled with efficient management and cost control exercise has led to the improvement in Operating Margins. The operating profit surged 37.72% to Rs. 187.99 crore.
Similarly, strict cost control measure has seen interest charges lower to Rs.24.93 crore in FY04 as compared to Rs 31.20 crore in the previous corresponding period. The Profit after Tax at Rs 88.67 crore is higher by 73.59% reflecting bottom line growth exceeding the expectations. EPS for the Nine months is at Rs 22.88 for FY04 as compared to Rs 12.99 in the same period last year.
Capacity Expansion Program
Commenting on the recently announced capacity expansion program, Mr. Kalyani said, "BFL is significantly enhancing its small forging capacity by setting up two additional 6000 MT press lines, including one fully automated transfer press line. These additions will more than double BFL's passenger car crankshaft forging capacity to approximately 3 million crankshafts per year. Similarly, BFL is investing in the heavy forging facility and state of the art machining facility to meet the emerging potential demand."
Background
Bharat Forge Ltd., is the flagship company of the Rs. 2500 crores Kalyani Group which has significant presence in the key sectors of the Indian economy. Established in early 1960's, Bharat Forge Limited (BFL) today is a globally competitive organisation with world class engineering capabilities and state-of-the-art manufacturing facilities. Bharat Forge is the largest forging company in Asia and one of the three largest and most technologically advanced commercial forge shops in the world. It has the world's largest single location forging capacity. BFL is internationally respected for its cutting edge technology and established quality process and capabilities developed over the years.
