Bharat Forge

March 03,2021

Bharat Forge has registered 6% fall in consolidated revenue to Rs 1723.11 crore. With OPM expand by 440 bps to 16.5%, the operating profit was up by 28% to Rs 283.77 crore. Expansion in OPM was largely driven by improvement in performance of Overseas Operations.The PBT before EO was up by 48% to Rs 127.24 crore largely as interest cost stand lower as proportion to sales. The EO expense jumped up by 985% to Rs 299.45 crore and thus the PBT after EO was a loss of Rs 172.22 crore as against a profit of Rs 58.52 crore in the corresponding previous period. Taxation was up by 264% to Rs 34.50 crore. It was a loss of Rs 206.71 crore at PAT level as against a profit of Rs 49.04 crore in the corresponding previous period. Eventually the net profit after MI was a loss of Rs 209.21 crore (as against a profit of Rs 41.79 crore) after accounting for lower share of loss from associates/jv and lower minority interest.
  • Standalone sales was down by 4% to Rs 1035.73 crore.Lower sales together with 120 bps contraction in OPM to 20.7%, the operating profit was down by 9% to Rs 214.82 crore. The PBT was down by 19% to Rs 126.86 crore hit by lower OI and higher depreciation. The EO was RS 5.47 crore as against nil in corresponding previous period and thus the PBT after EO was down 23% to Rs 121.39 crore. Eventually the PAT was down by 27% to Rs92.71 crore.
  • On deducting standalone financials from consolidated financials, the sales was lower by 9% to Rs687.38 crore. But with OPM turn positive to stand at 10% compared to negative 1.8% in corresponding previous period, the operating profit was a profit of Rs 68.95 crore as against a loss of Rs 13.29 crore in the corresponding previous period. The PBT before EO was a profit Rs 0.38 crore compared to a loss of Rs 71.38 crore in the corresponding previous period. With EO expense stand higher by 965% to RS 293.98 crore, the PBT after EO was a loss of Rs 293.60 crore up from a loss of Rs 98.98 crore in the corresponding previous period.
  • Sharp jump in EO expense for the quarter is largely due to provision of Rs 274.268 crore provided during the quarter towards settlement with Germany's National Competition Regulator by the company's German Subsidiary; Rs 19.711 crore towards expense on manpower optimisation in overseas subsidiary and Rs 5.472 towards VRS expenses at Mundhwa and Satara Plant in India.

Nine month performance

Consolidated sales was lower by 33% to Rs 4253.41 crore. And with OPM contract by 510 bps to 10.2%, the operating profit was down by 55% to Rs 435.96 crore. The PBT before EO was down by 97% to Rs 16.15 crore hit by lower other income and higher depreciation. With EO expense stand higher at Rs 305.43 crore from modest Rs 27.60 crore, the PBT after EO was a loss of RS 289.27 crore compared to a profit of Rs 546.05 crore. Eventually the net profit after MI was a loss of Rs 334.99 crore compared to a profit of Rs 421.93 crore in the corresponding previous period.

During the quarter ended December 31, 2020, Germany's National Competition regulator (Federal Cartel Office )(FCO) has concluded the settlement with the Company's German subsidiaries. Accordingly an amount of Rs 274.268 crore has been provided for nine months period ended December 31, 2020 in consolidated results towards such settlement including related expenses. The settlement amount will be paid over the period of next 5 years. Expenses of Rs 22.7 77 crore for the nine months ended December 31, 2020 in consolidated results being expense on manpower optimzation in overseas subsidiaries. Expenses of Rs 8.380 crore in standalone results on account of Voluntary Retirement Scheme (VRS) declared by the Company for its employees at Mundhwa and Satara Plant.

Management Comment

B.N. Kalyani, Chairman & Managing Director said, The strong recovery in end market demand across sector continued into this quarter enabling the company to register healthy double digit growth in key parameters. On a sequential basis, Revenues, EBITDA & PBT grew by 17. 5%, 39. 9% & 42. 2% respectively. The union budgets focus on infrastructure development along with the vehicle scrapping policy bodes well for both the Commercial Vehicles & Industrial sector growth over the medium term. The government's recent announcement on Production Linked Incentive (PLI) coupled with the mission of AtmaNirbharta are major steps in enhancing the scale & competitiveness of manufacturing in India. We expect these initiatives to open up new growth opportunities for the company. Looking ahead to into the coming quarter, demand is expected to remain robust across all key geographies & sectors. In the export market, we are witnessing demand recovery across sectors.

Bharat Forge: Consolidated Results

 

2012 (3)1912 (3)Var. (%)2012 (9)1912 (9)Var. (%)2003 (12)1903 (12)Var. (%)
Sales1723.111830.86-64253.416313.92-338055.8410145.73-21
OPM (%)16.512.110.215.313.820.3
OP283.77222.2828435.96966.60-551114.712055.57-46
Other inc.38.0037.192116.52134.19-13187.86202.79-7
PBIDT321.77259.4724552.481100.79-501302.572258.37-42
Interest33.6143.08-2284.80125.11-32171.33127.2235
PBDT288.15216.4033467.68975.68-521131.242131.15-47
Dep.160.92130.2824451.53402.0412547.72520.795
PBT before EO127.2486.124816.15573.64-97583.531610.36-64
EO Exp299.4527.60985305.4327.6099978.920.00
PBT after EO-172.2258.52PL-289.27546.05PL504.611610.36-69
Taxation34.509.4826444.37106.72-58112.46566.39-80
PAT -206.7149.04PL-333.64439.33PL392.151043.97-62
Share of Profit/(Loss) from Associates-3.74-8.60-57-5.45-21.49-75-42.90-11.38277
Minority Interest-1.24-1.36-8-4.10-4.090-0.590.42-239
Net profit -209.2141.79PL-334.99421.93PL349.831032.17-66
EPS (Rs)*####8.822.2
* EPS is on current equity of Rs 93.13 crore, Face value of Rs 2
# EPS is not annualised due to seasonality of business
Figures in Rs crore
Source: Capitaline Corporate Database

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