Bharat Forge reports 26% fall in Q1 PAT; to start operation of Nellore plant in H2 FY'20

Built with an initial investment of Rs 200 crore, the upcoming Nellore plant will serve as ‘Center of Light Weighting Technologies’ (CLWT) to support company's future expansion in electric mobility area. New Delhi: Auto component major Bharat Forge on Tuesday announced that the company will commence operation at its Nellore plant in Tamil Nadu in the second half of ongoing financial year 2019-2020.

Built with an initial investment of Rs 200 crore, the new plant will serve as ‘Center of Light Weighting Technologies’ (CLWT) to support company's future expansion in electric mobility area.

"During the quarter, the company secured new business worth US$ 30 million for automotive application across domestic and export markets. We look forward to the commencement of operations at CLWT Nellore in the coming quarter, " B.N. Kalyani, Chairman and Managing Director, Bharat Forge said in a statement.

The division will focus primarily on manufacturing aluminium/magnesium component for the automotive segment and even bagged its main domestic and exports orders, as per the company' latest annual report.

During April-June quarter, Bharat Forge reported 25.8 per cent dip in its standalone profit after tax (PAT) at Rs 174 crore for the first quarter ended June 30, 2019 as compared to Rs 234.5 crore in the same quarter year ago.

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Total revenue declined 9 per cent at Rs 1,346.6 crore during the Q1 FY'20 as against Rs 1,479.7 crore in the same quarter last year due to weak demand environment in domestic market and inventory de-stocking in oil and gas.

Commenting on the quarterly results BN Kalyani, Chairman and Managing Director, Bharat Forge said "Q1 FY20 was a challenging quarter with negative demand development in the domestic market across segments, with OEM's focussed on correcting inventory levels across the value chain. This coupled with the inventory destocking in the export Oil & Gas business, had an adverse impact on our performance."

He further added," While the sales development through the course of FY20 is dependent on end markets, our focus will be on aggressively cutting cost, accelerating new product development through our own R&D, free cash generation and strengthening the balance sheet. We have previously seen such cycles and are confident of coming out stronger and faster than before."

EBITDA for the period under review stood at Rs 352 crore, down 17.9 per cent, as compared to Q1 FY'19.