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Bharat Forge anticipates slow growth in aerospace segment

Pratik Shastri
/ Categories: DSIJ Mindshare
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Bharat Forge anticipates slow growth in aerospace segment

According to forging company, Bharat Forge Limited, the aerospace (aviation) sector is one of the most affected sectors due to the coronavirus outbreak led lockdown worldwide.

In terms of total revenue, Bharat Forge has relatively low exposure to the sector. Still, since flight operations in most countries have contracted, the usage of aircrafts and expenditure on aircraft purchases and manufacturing is impacted severely. Therefore, the company expects to see an adverse impact on the overall sales of the aerospace business.

Fascinatingly, the company was anticipating growth in the aerospace segment with an increase in its client base from one customer last year to four customers by FY20 end. This might not go well with the fixed costs of the project which are already made. Delay in actual revenue recognition may weigh on the overall business.

Overall, with one segment having an adverse forecast and exposure to the commercial vehicle class (38 per cent of total revenues), the outlook is still looking grim for the company. The stock is already trading at its multi-year low. Looking at how things are currently looking for the company, investors would certainly think twice before taking any decision.

The company's stock closed at Rs 334.60 on Thursday, down by one per cent on BSE.

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