Bharat Forge (BFL) held a conference call to discuss quarterly and nine months ended results and future growth plans. B. N. Kalyani, Chairman and Managing Director, addressed the conference call. Amit B Kalyani, Executive Director, P K Maheshwari, Executive Director, Sanjeev Joglekar, Chief Financial Officer & Sr. VP (Finance) and Mohan Sapre, Sr. VP (Finance)
Highlights of the call
- During the quarter under review, the demand for automobiles globally across all segments saw an unprecedented and sudden drop, which caught the entire industry by surprise.
- The next 2 quarters to be challenging in nature on account of inventory built up at customers end.
- In October – December 2008, Domestic M&HCV production plunged by 62% on a Y-o-Y basis while the overall passenger & Commercial vehicle production dropped by 20%. Similar sharp declines were witnessed in the US & European Automotive industry. In fact, the Indian Automotive Industry had registered a growth of 10.2% in passenger and commercial vehicle production in the first half of FY 2009.
- The share of Non- Automotive segment is expected to increase to around 35% in FY’10 from around 17-20%.
- The non auto facilities (HFD – II and CAM, Baramati) have commenced operations, as per schedule. The Heavy forge division is in ramp up mode while the Baramati facility is under trial production and will be developing different parts for customers in the current quarter and serial production is expected to start as per schedule.
- The Margins in the Non Automotive business are higher as compared to the Automotive business
- There is no major capex planned for the FY 2009-10.
- The Debt on books of BFL stand-alone is around Rs 1400 crore (Majority of it being FCCB).
- Number of the people on company’s payroll is around 4500
- Company has taken many steps so as to reduce costs
- Plans to explore opportunities for and where appropriate to effect buy-back of FCCB issued by and outstanding as on date
- Total Export revenue during the quarter under review stood at Rs 244 crore. Around Rs 91 crore from US and around Rs 136 crore from Europe.
- In the Non-Automotive segment the company has made a total investment of around Rs 300-350 crore.