Auto components major Bharat Forge on Friday reported a consolidated net profit of Rs 212.12 crore in the fourth quarter ended March 31 riding on robust sales.
The company had posted a consolidated net loss of Rs 68.59 crore in the same quarter previous fiscal, Bharat Forge Ltd (BFL) said in a regulatory filing.
Consolidated revenue from operations during the period under review stood at Rs 2,082.85 crore as against Rs 1,741.92 crore in the year-ago quarter.
For the fiscal ended March 31, 2021, the company posted a consolidated net loss of Rs 126.97 crore. It had posted a consolidated net profit of Rs 349.25 crore in the previous fiscal, BFL added.
Consolidated revenue from operations in 2020-21 stood at Rs 6,336.26 crore as against Rs 8,055.84 crore in 2019-20, the company said.
BFL Chairman and Managing Director BN Kalyani said, "The year has ended on a strong note with sharp recovery visible in all our end markets. Q4 FY21 has witnessed a 26.2 per cent growth in sales on back of 43 per cent growth in exports, which is now witnessing growth in all key segments."
In an earnings presentation, the company said, in the domestic automotive sector "the spate of changes in regulations coupled with deteriorating fundamentals of the underlying economy led to torrid times for the industry...
"Enhancement of safety norms, increase of axle load norms, GST, emission norms change from BS-IV to BS-VI within a short span of time resulting in increased total cost of ownership were some of the headwinds the industry has had to encounter."
The declining trend in underlying demand was underway even before the COVID-19 pandemic. Over the period FY18 to FY21, production volumes for medium and heavy commercial vehicles (M&HCV), and passenger vehicles segment have declined by 47 per cent and 24 per cent, respectively, it added.
It, however, said, "Although the near term outlook is negative due to the lockdown to curb the second wave of COVID-19, the medium to long term outlook is very encouraging especially for the M&HCV sector."
The focus on infrastructure spending, government's focus on increasing manufacturing as percentage of of GDP from 16 per cent to 25 per cent, Production Linked Incentive (PLI) schemes, Aatmanirbhar Bharat policy and the scrappage policy coupled with investment in road infrastructure points to a long runway for the M&HCV sector, it added.
In the international market, the company said, "The global automotive industry has picked up smartly post the COVID-19 lockdown and all segments have witnessed sharp rebound across geographies."
Demand outlook provided by original equipment manufacturers (OEMs) is quite robust going ahead. There are certain uncertainties which could hamper the progress of the industry, including the shortage of ships, container shortage and sharp increase in commodity prices, it added.
On the outlook, Kalyani said, "As we enter FY22, we are seeing robust demand continue in major segments in the export business. The lockdown in India to curtail the spread of COVID has clearly had an impact on demand and production in the automotive sector. We are optimistic that this weakness is temporary in nature and we will witness growth in India as business activities normalise.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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