Bharat Forge Expects Industry-Beating Growth In 18 Months

Bharat Forge Ltd. is banking on industry-beating growth in the next year and a half even though a one-time expense drove the company into the red in the third quarter.

“We will outgrow the industry in every segment we operate,” Amit Kalyani, managing director of Bharat Forge, told BloombergQuint’s Niraj Shah in an interview. The growth, he said, would not be at the cost of margins as they will recover and come back.

Kalyani is wary of an inflationary impact with an anticipated pass-through of raw material costs but is confident of margins remaining strong.

While Bharat Forge’s didn’t report any new drilling for shale gas, Kalyani isn't worried. Demand in shale will be the first to kick in, he said, adding that shale is an easy “swing producer” as companies have a lower breakeven point.

Kalyani hopes that the U.S maintains it’s energy security resulting in another international boom in shale demand and RoDTEP scheme—for refunding levies on exports—will aid overseas business, the government’s infrastructure spend will aid the domestic business.

He also looks forward to an efficient implementation of the 2021 vehicle-scrappage policy to give the business an added boost. Kalyani is sure that every sector of the automotive industry is bound to do well with a country-wide growth of 50%.

Q3 results highlights (year-on-year)

• Reported a net loss of Rs 210.4 crore, owing to an exceptional loss of Rs 299.4 crore.
• Revenue rose 6% to Rs 1,723.1 crore
• Operating profit rose 28% to Rs 283.7 crore
• Margin expanded 440 basis points to 16.5%

Watch the entire conversation here: