Bharat Forge surges 8%, hits 52-week high post March quarter results

The company's management said it expects robust demand to continue in major segment in the export business

Shares of Bharat Forge moved higher by 8 per cent to Rs 749, also its 52-week high on the BSE in intra-day trade on Friday after the company reported a consolidated profit after tax of Rs 212 crore for the March quarter (Q4FY21), on healthy sales income. The auto ancillary company had posted a loss of Rs 68.6 crore in Q4FY20. The stock had hit a record high of Rs 800 on March 1, 2018.

The company’s revenue from operations grew 19.6 per cent to Rs 2,083 crore in Q4FY21, as against Rs 1,742 crore in the year-ago quarter. Despite cost inflationary pressures, EBITDA (earnings before interest, taxes, depreciation, and amortisation) has increased by 310 basis points, the company said.

"During the quarter, the company has been declared as the successful bidder for Sanghvi Forgings based in Vadodara. This enhances the company’s footprint in India and builds upon our industrial product manufacturing capabilities. The company recently also secured an order from the government for development and supply of components and products and the same shall be executed by end of September 2021," the firm said.

The company’s management expects robust demand to continue in major segment in the export business. The lockdown in India to curtail the spread of Covid has clearly had an impact on demand and production in the automotive sector, it said. However, the management is optimistic that this weakness is temporary in nature and will witness growth in India as business activities normalize.

“The balance sheet at end of the financial year 2020-21 (FY21), continues to be robust with a significant level of liquidity. Operating cash flows were strong in FY21 and will improve further in FY22. Return ratio will normalize towards the 20 per cent range with improvement in asset utilisation in the coming years,” B.N. Kalyani, chairman & managing director of Bharat Forge said.

At 12:50 pm, the stock erased its partial intra-day gain and was up 4 per cent at Rs 721, as compared to a 0.03 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped over four-fold, with a combined 13.6 million shares having changed hands on the NSE and BSE at the time of writing the report.