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Stock Ideas Top Headlines Firm show Results : Bharat Forge
Stock Ideas Top Headlines Firm show Results : Bharat Forge 
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| Firm show Results : Bharat Forge |
| Tuesday, 19 June 2007 | ||||||||
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Consolidated net sales surged 38% to Rs 4178.30 crore and net profit 16% to Rs 290.59 crore in the year ended March 2007 over FY 2006. There was extraordinary (EO) expense of Rs 12.14 crore as against nil in FY 2006. Consolidated net sales grew 17% to Rs 1109.78 crore and profit after tax (PAT) 16% to Rs 80.05 crore in the quarter ended March 2007. The standalone results, too, displayed strength. Net sales jumped 18% to Rs 516.05 crore and PAT 21% to Rs 64.29 crore in the quarter ended March 2007 over the quarter ended March 2006. Net sales jumped 18% to Rs 1864.40 crore and PAT 16% to Rs 240.96 crore in the year ended March 2007 over FY 2006. BFL operated around 77% of the installed capacity of 2,40,000 tonnes of forging capacity in FY 2007, and aims to operate at around 100% of the capacity by end FY 2008. Thereafter, it will debottleneck the capacity to increase utilisation beyond 100%. The company expects the domestic margin to improve from this level, with more machined, high value-added component sales happening. BFL has secured one large order in the automotive segment and two orders in non-automotive segment, each of US$ 50-million, to be completed in 12-18 months. The share of the non-automotive business in BFL’s turn over was 17% end March 2007. BFL expects to increase it to 25% by end March 2009 and 40% by end March 2012. The company is aiming at the aerospace, railways, marine and hydrocarbon business in the non-automotive segment. A new plant will be set in at Baramati in Maharashtra for its foray into the non-automotive segment at a capex of Rs 350 crore and with around 1,200 engineers. The capex will be spread across two years. The Baramati plant will start generating revenue from April 2008. A capex of Rs 140 crore will be incurred in Pune over two years to built open-ended die-forging capacity, i.e., forgings used in windmill, turbine components and motor. Apart from this, BFL will continue to incur annual capex of Rs 60-80 crore every year. BAL’s Chinese joint venture (JV) reported a loss of Rs 16 crore at the PAT level. Of this, Rs 5.75 crore is a one-time EO item. The JV expects to break even next year. The Chinese JV operated at 38% of the installed capacity in FY 2007. BAL says there will not be a major jump in net sales of subsidiaries as they operate in markets, growing at 1%-2%. But the growth will come from relationship with global customers, which will bring more business, new technologies, and new products. But margin is set to improve with the effective use of new technologies. The earning before interest, tax and amortisation (EBITA) margin of the subsidiaries will rise to 14% in the next two years from around 9% this year. "Over the past one year, we have focused on ramping up the forging and machining capacities in India, and driving the operating improvements in our newly acquired China operations. We have achieved good progress on all these counts. In retrospect, I will term 2007 a year of consolidation: completing our ambitious expansion program in India and beginning of aggressively ramping up capacity utilisation," said B N Kalyani, Chairman and Managing Director. "On the global front, we continued implementing operational improvement initiatives across all our subsidiaries. We expect to see consistent growth in our automotive business as we deepen our customer relationship and widen our product offerings. The non-automotive business is an exciting new growth area for BFL. We expect it to be a major additional driver of growth going forward."
Bharat Forge: Consolidated Results 0703 (12) 0603 (12) Var. (%) Sales 4178.3 3018.89 38 OPM (%) 15.5 17.3 OP 646.36 522.78 24 Other income 96.92 66.12 47 PBIDT 743.27 588.91 26 Interest 106.7 68.35 56 PBDT 636.58 520.56 22 Depreciation 188.11 128.07 47 PBT & EO 448.47 392.49 14 EO -12.14 0 PL PBT after EO 436.32 392.49 11 Provision for Taxation 138.65 125.79 10 Deferred Tax 14.21 16.16 -12 PAT 283.47 250.54 13 Minority Interest -7.12 0 Net Profit 290.59 250.54 16 EPS (Rs)* 13.4 11.3 * Annualised on current equity of Rs 44.54 crore. Face Value: Rs2 each. Var. (%) exceeding 999 has been truncated to 999. LP: Loss to Profit. PL: Profit to Loss. EO: Extraordinary items. EPS is calculated after excluding EO and relevant tax. Figures in Rs crore. Source: Capitaline Corporate Database.
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