Bharat Forge (500493) Q4 03/04 earnings summary

Executive summary

• FY2003-04 total revenue rose 32% YoY to Rs.8,511 million; PAT increased 54% to Rs.1,249 million, with exports and domestic demand both contributing.

• Operations reached close to 100% capacity utilisation from Q4 as domestic and international order books expanded; management expected FY2004-05 to be stronger.

Financial highlights

• Total revenue Rs.8,511.4 million, up 32.0% YoY; net sales Rs.8,320.5 million, up 30.9%.

• Operating profit (PBDIT) Rs.2,592.8 million, up 32.4%; PBIT Rs.2,135.1 million, up 38.6%.

• PAT Rs.1,249.0 million, up 54.0%; EPS Rs.32.28 vs Rs.20.71 in FY2002-03.

• Domestic sales rose 37% to Rs.4,991 million; exports grew 22.6% to Rs.3,330 million and represented 39% of total sales revenue.

Outlook and guidance

• Management was optimistic FY2004-05 would be better, citing expanding demand across geographies, strong order books and expected capacity additions.

• New capacity was planned in passenger-car forgings, heavy forgings and crankshaft machining; two machining lines were expected in FY2004-05 and a third in FY2005-06.

• Planned additions were expected to increase forging capacity by over 100,000 MT and machining capability to over 600,000 crankshafts.