Auto components major Bharat Forge on Friday reported 18.72 per cent decline in consolidated net profit at Rs 205.48 crore in the second quarter ended September 30.
The company had posted a consolidated net profit of Rs 252.8 crore in the same period last fiscal, Bharat Forge said in a regulatory filing.
Revenue from operations during the period under review stood at Rs 2,155.2 crore as against Rs 2,597.27 crore in the year-ago quarter, down 17 per cent.
The company said its board of directors, at its meeting held on Friday, has declared an interim dividend of Rs 1.50 per equity share of Rs 2.
Commenting on the performance, Bharat Forge Chairman and Managing Director BN Kalyani said, "The quarter gone by has been the toughest period witnessed by the company in this decade."
The sluggish macroeconomic environment in India resulting in weak end demand across sectors coupled with automotive original equipment manufacturers' (OEMs) need to destock ahead of introduction of BS-VI emission standards led to demand declining continuously through the quarter, he added.
This underlying weakness has resulted in 35.6 per cent de-growth in domestic revenues while the export revenues have declined by 18.1 per cent, he added.
Kalyani, however, said amidst this weak environment, the passenger vehicle components business stood out across both domestic and export markets with strong out performance against underlying demand. It stood at Rs 57.6 crore, up 20.9 per cent as compared to same quarter last year.
In commercial vehicles, Bharat Forge said the slowdown in economic activity coupled with the impact of increased axle load norms and transition to BS-VI emission norm from April 1, 2020, had led to OEMs focusing on clearing across the value chain.
"Auto components supplier have been more impacted because of the inventory of components with OEMs. For the quarter, CV business revenues have declined by 67.6 per cent to Rs 93.5 crore compared to Q2 FY19," the company added.
Kalyani said the company is using the current environment to cut costs more than earlier anticipated which will bear results once the demand environment stabilises.
Bharat Forge is looking intensively at improving productivity across all facilities and putting more thrust on new product development and research to add value to relationships with all customers, he added.
On the outlook, he said, "Looking ahead, given the prevailing environment in India and the slowdown in North America and Europe, we expect H2 FY20 to be lower than H1 FY20."
Kalyani further said, "Over the next two-three quarters, our focus will continue on strengthening the balance sheet, free cash generation, new product development and opportunistic inorganic growth avenues.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)