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Decline in share price of Bharat Forge by over 2 percent

According to reports, the share price of Bharat Forge declined over 2 percent intraday as on 15th February.

This is on account of the company’s incurrence of a loss of Rs 210.44 crore in the December 2020 quarter.

However, the company had reportedly yielded a profit of Rs 40.40 crore in the comparable quarter in the previous year.

Previously, the company had to provide Rs 274.26 crore during the quarter towards a fine imposed on the company’s German subsidiary.

For manpower optimisation in overseas subsidiaries, the company had to expend a whooping amount of 19.71 crore.

Besides this, the company also had to spend Rs 5.47 crore on VRS for employees at Mundhwa and Satara plants.

In addition, the company’s consolidated revenue dropped by 6% y-o-y amounting to Rs 1,723 crore in the December quarter.

Moreover, a faster recovery was expected in the automotive business with demand for heavy trucks in Europe and North America.

To improve fleet utilisation and M&HCV demand further in the coming quarters, there is increased spending on infrastructure.

However, the spending is also included on account of mobilisation of construction projects and mining activities in the domestic market.

Further, the oil & gas segment is unlikely to recover.

Revenues were impacted due to the lack of export incentives, which are likely to be restored from Q4 FY21.

Currently, it is looking at new sectors like EV components (power electronics, control and battery management systems), light weighting business as new areas of growth.

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