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 as the company reported a loss in the third quarter because of an exceptional item.

“We will outgrow the industry in every segment we operate,” Amit Kalyani, deputy managing director at Bharat Forge, told BloombergQuint’s Niraj Shah in an interview. But the growth, he said, won't come at the cost of margin.

While Kalyani cautioned about an inflationary impact from an anticipated pass-through of raw material costs, he is confident of the profit margin remaining strong.

Bharat Forge didn’t report any new drilling of shale gas but Kalyani isn't worried. Shale demand will be the first to kick in, he said, adding that the producers have a lower breakeven point. Kalyani is hopeful that the U.S. maintaining its energy security will result in another shale boom.

He expects India's RoDTEP scheme—for refunding levies on exports—to aid its overseas business, while he sees the government’s infrastructure spend boosting its domestic business. Another factor that Kalyani sees helping the automotive sector is the 2021 vehicle-scrappage policy.

Q3 Highlights (Year-On-Year)

• 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:

(Corrects an earlier version that misstated Amit Kalyani’s designation.)