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Bharat forge fort to be held by Domestic Business

Backed by a rebound in the commercial vehicle segment, the domestic business of Bharat Forge Ltd outperformed exports in the December quarter.

An increment of 21 percent was recorded in domestic revenues on year-on-year (y-o-y) in Q3FY21.

This is due to growth by a 49 percent margin in medium and heavy commercial vehicle segment.

In the long run, Bharat Forge’s venturing into new areas will enhance support besides the current upward trend in autos.

So far, moderate growth can be seen in the passenger vehicles and non-auto segment.

However, the growth of exports isn’t very promising due to the oil and gas segment.

A sharp decline was witnessed in the revenue from oil and gas exports coming downtown to $3 million in Q3FY21 from $10 million in Q2FY21.

According to analysts, the domestic and export CV segment of Bharat Forge are looking forward to strong recovery and enhanced growth.

Export revenues reportedly declined by 19% y-o-y marred by a 60% y-o-y revenue decline in non-auto segments in the Q3FY21.

It is to be noted that downswing is by a margin over 80 percent from its quarterly peak run-rate of $30 million.

Moreover, the gain of new businesses including metals and mining and renewables to reflect on earnings from the second half of FY22.

The policy of de-risking from the oil and gas segments will ensure that new segments are volatile and have similar business challenges.

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