Bharat Forge Q1 Net Profit shoots up 35 per cent to Rs 195.32 Crore

Bharat Forge (BFL) announced its unaudited results for the June quarter on August 3rd, 2015. The company reported a strong growth of 34.73 per cent in Profit after Tax (PAT) on year on year basis, PAT reached to Rs 195.32 crore in Q1FY16 against Rs 144.97 crore in Q1FY15. The main reason of this significant growth is 20.88 per cent increase in export and strong focus on execution, operational efficiency as well as better cost control.

BFL a Kalyani group company, despite a challenging demand environment in the commodity and allied sectors, registered strong performance with revenues growing by 14.21 per cent to reach Rs 1128.54 crore in Q1FY16, compared to Rs 988.13 crores in Q1FY15. The comapny's domestic revenue increased by 6.83 per cent on an annual basis and export revenue too increased. The Export revenue increased mainly due to the automotive segment, which showed strong growth of 36 per cent, as increasing demand from North America, Europe & Asia Pacific.

Its total operating expenditure also up by 11.01 per cent from Rs 704.83 crore in Q1FY15 to Rs 782.44 crore in Q1FY16. BFL'S total expenditure raised mainly due to a 16.22 per cent year on year growth in employee cost and 9.76 per cent increase in other expenses for the same period.

BFL's Earnings before interest, tax, depreciation and amortization (EBITDA) boosted by 22.17 per cent on an annual basis to reach Rs 346.10 crore in Q1FY16 and its EBITDA margin expanded by 200 basis points to 30.67 per cent in Q1FY16. The company's profit before tax (PBT) too increased by 37.72 per cent from Rs 210.10 crore in Q1FY15 to reach Rs 289.36 crore in Q1FY16. BFL's profit after tax (PAT) margin expanded by 264 basis points to reach 17.31 per cent in Q1FY16.

As per the reports the order book continues to remain healthy in the automotive space with new export order wins in the passenger & commercial vehicle segments. On the industrial business, new order wins from Railways and expansion of product portfolio in the aerospace sector. Focus of “Make in India” initiative is starting to produce results with new orders from the domestic industrial segment and the company expects to accelerate with pick up in industrial activity.

Looking ahead to Q2, BFL anticipates the demand to be higher compared to Q2FY15 with positive automotive demand while the challenging demand environment in the Industrial sector will continue for some more time as the global economies adjust to the lower commodity prices.