Bharat Forge declines on profit booking

Bharat Forge bore the brunt of profit booking despite posting sterling results, easing from its new 52-week high of Rs 221.65.

At 14:20 IST, the scrip of the auto ancillary was flat at Rs 214.30, up 0.80%. Over 1.50 lakh BFL shares changed hands on BSE by then.

In afternoon trades, BFL unveiled impressive third quarter results that showed a 238.5% rise in net profit to Rs 21.36 crore compared to Rs 6.31 crore in the corresponding period of the previous year. Total income increased by 51.6% to Rs 169.19 crore (Rs 1.69 billion) from Rs 111.58 crore (Rs 1.11 billion).

The results are held to be in line with market expectations. Analysts say that despite the current profit booking, the stock should appreciate once the correction is done with.

The impressive results of BFL come on the back of a spectacular performance on the export front. Going forward, too, the company is expected to show good progress following its heightened focus on exports by adding marquee customers, securing more business from existing customers and acquisitions .

BFL is the flagship company of the Kalyani Group. It is the largest forging company in Asia and one of the three largest and most technologically advanced commercial forge shops in the world. The company manufacturers a wide range of forgings and machined components for the automotive, diesel engine, railway, earthmoving, cement, sugar, steel, coal, shipbuilding and oilfield industries as also general engineering equipment.

Its product range includes finished machined crankshafts, sub-assembly of industrial machinery, axle beams, steering knuckles, connecting rods, automotive engine and suspension components, etc. It is the number one axle component manufacturer in the world (25% world market share) and number two engine component manufacturer in the world. Engine and axle components together account for 80% of the company's total sales.

Its domestic clients include big OEM players like Ashok Leyland, Telco, Mahindra, Eicher, Escorts, Maruti Udyog, Bajaj Auto, Cummins and BEML. Its export clients include Meritor Automotive, First Auro Works, Dana Corporation, Mercedes Benz, New Holland Ford, Mitsubishi Motor Corporation, Volvo Trucks, Lister-Petter, Dirona, Renault, Toyota, Daimler Chrysler, Spicer, Sang Motors, Caterpillar-Perkins, Isuzu and Macimex.

Over the years, BFL has created world class capacities and capabilities. It is the second company in the world to have two 16,000 MT forging lines and with an installed capacity of 102,900 MT per annum.

It possesses the largest single location commercial forging facility in the world. Both the forging press lines are highly flexible which gives the company an inherent advantage to simultaneously meet different customer demands and optimise capacity utilisation. BFL's machining facilities too are world class and comparable to the best in the industry.

As on 30 September 2002, the promoter's holding in the company was 37.26%, while the public, domestic institutions and foreign institutions held 23%, 16.06% and 4.33%, respectively.