Bharat Forge Q2 net profit doubles at Rs 175 cr

Revenue for the quarter at Rs 1,138.3 cr was up 34.7% from Rs 845 cr in the same quarter last year

Pune headquartered forging major Bharat Forge yet again has delivered a good set of results on the back of growth from the US and demand back in the industrial and commercial vehicle market.

Bharat Forge net profit for the second quarter ended September 30, 2014 more than doubled at Rs 174.5 crore from Rs 96.4 crore in the corresponding quarter of last financial year.

Revenue for the quarter at Rs 1,138.3 crore was up 34.7% from Rs 845 crore in the same quarter last year.

Sequentially too (trailing quarter basis) the company's net profit was 20.3% and revenue was up 15.2%.

"Our Q2 FY15 performance has been better than expected on the back of continued robust export growth, in particular from North American Industrial & Commercial Vehicle market. Looking ahead into Q3, we expect demand to improve across all segment with volumes increasing compared to Q2 FY15. We expect North America demand to increase while Europe is expected to soften a bit," said Baba Klayani, chairman & managing director, Bharat Forge.

On the domestic front the company said that with the overall business confidence improving in the country, automobile industry is showing signs of some recovery with overall demand increasing. However, demand across segments continue to be volatile and yet to stabilize.

"We expect the domestic industrial sector to increase in the next two quarters largely driven by 'Make in India' initiatives of the Government of India. The domestic automotive market is showing signs of stability but the CV segment could take some more time depending on the overall economic conditions," said Kalyani.

Revenue contribution from the industrial side of the business has been increasing consistently, primarily from the export market. Industrial sector now contributes around 47% of the total standalone revenues up from 37% in the corresponding period previous year. Industrial segment in Q2 FY15 has grown by around 19% on a sequential basis and by 72% on an annual basis.

"Leveraging our in-house R&D and Innovation capabilities, we developed new products and technologies enabling us to win our maiden order from SAFRAN and two other global OEM's in the Aerospace sector for supply of mission critical forgings. We expect to achieve more significant order wins in the coming quarters," added Kalyani.