Indian forging company Bharat Forge reported a loss of Rs563mn ($46mn) in Q1 (April-June) due to negative impacts of COVID-19 and believes that in the next quarter, revenues will be flat from September quarter of prior year as exports are expected to be lower compared prior year. Demand will be the key factor in the coming months, according to the company.
Bharat Forge manufactures several forging components to cater to numerous sectors including auto, power and gas, aerospace, construction, mining, railways and marine. During the lockdown period, activities in auto sector, aerospace companies and mining firms were shuttered with marginal demand for components from power and energy firms.
Bharat Forge’s Q1 profitability was hurt as a result of dampened demand across most of its consuming sectors, leading to low sales for the compnay and in turn leading to lower demand for all the metals Bharat Forge consumes.
The company stated that demand improvement is visible across domestic as well as export markets but revenue may remain flat in Q2 FY21 compared to prior year. Exports will also be lower than Q2 FY2020.
The company, in Q1, was operational for only a month at 20pc capacity utilization leading to a poor quarterly performance. The company during the quarter focused on cost reduction and improved productivity.
Bharat Forge reported a total revenue for Q1 at Rs4,270mn down 68pc from the prior year and 51pc from the previous quarter. The company’s operating profit dipped 99pc in Q1 to Rs17mn and down 98pc from the previous quarter. The company posted a net loss of Rs563mn from a net profit of Rs1,740mn posted in Q1 2019.
($1 = Rs 74.84)