Bharat Forge (500493) Q4 02/03 earnings summary

Executive summary

• FY02-03 delivered record sales, operating profit, PBT, PAT, EPS and returns, led by export growth, cost controls and operating efficiencies.

• Sales rose 45% to Rs.6,860 million; exports grew 146% to Rs.2,714 million and represented 39% of total income.

Financial highlights

• Total income increased 44.0% to Rs.6,955 million; PBDIT rose 63.7% to Rs.1,959 million and PBT increased 227.7% to Rs.1,133 million.

• PAT reached Rs.811 million versus Rs.213 million; EPS increased to Rs.20.71 from Rs.5.31.

• Interest outgo fell to Rs.408 million from Rs.454 million; operating expenses excluding depreciation and interest rose 37.5% versus sales growth of 45%.

• Domestic sales grew 15%; exports rose 146%, supported by China, Europe and US demand across customer segments.

Outlook and guidance

• FY03-04 sales, customers and exports were expected to increase; export share of total sales was expected to rise further, supported by a healthy order book and long-term supply contracts.

• Existing capacity was expected to reach full utilisation by Q3 FY03-04; recovery in domestic vehicle demand was expected to continue.

• Machining capacity expansion and smaller forging presses were planned; a second 6,000 MT press was being installed, with two further presses possible subject to long-term customer contracts.

• Overseas acquisitions were under consideration; increased R&D budgets were planned to strengthen new-product development.