Bharat Forge net rises 61%; to issue 1:1 bonus shares

Bharat Forge, the world’s biggest forging company, on Wednesday reported that its net profit for the three months to September rose by 60.5 per cent to Rs 203.72 crore, thanks to higher income and operational performance. This was marginally higher than the Rs 200 crore estimated by analysts tracked by Bloomberg.

The Pune-headquartered auto components major had posted a net profit at Rs 126.89 crore during the same quarter last year, Bharat Forge said in a regulatory filing.

Revenue increased 41.3 per cent year-on-year to Rs 1,258 crore. The top line also met the Bloomberg consensus estimate of Rs 1,250 crore.

Operating performance improved as earnings before interest, tax, depreciation and amortisation (Ebitda) more than doubled to Rs 370 crore from Rs 146 crore in the year-ago period. Operating margin expanded 176 basis points to 29.4 per cent.

The company declared an interim dividend of 100 per cent on fully paid equity shares of Rs 2 each. The board also approved a bonus issue of shares in the ratio of 1:1.

Bharat Forge shares rose more than 2 per cent to a lifetime high of Rs 729.95 apiece in intraday trade after the earnings announcement.

“The company’s performance in Q2 FY18 has been strong with all round growth across domestic and export business. Domestic revenues grew 26 per cent and export income 56 per cent,” Baba Kalyani, chairman and managing director, Bharat Forge, said.

Despite continued inflationary pressures, Ebitda margins at 30.3 per cent expanded by 190 bps as compared to the same quarter in the previous year, driven by better product mix, enhanced productivity and favourable exchange realisation, he said.

Kalyani said the company’s focus on new product development and increasing wallet share with customers by leveraging technology and its in-house R&D capabilities is gaining traction.

“We have secured new orders worth more than $40 million YTD FY18 across geographies and business applications,” Kalyani said.

The company is setting up Centre for Light Weighting Technology (LWT) facility in Andhra Pradesh, focused on aluminum and magnesium components and products. This will enable the firm to address the need for light weighting solutions, arising from the shift to BS VI and electric vehicles.

“As we look ahead in to Q3 FY18, we expect to see continued improvement in underlying demand across geographies and businesses,” Kalyani said.