Bharat Forge (500493) Q4 05/06 earnings summary

Executive summary

• Global expansion through acquisitions and organic growth established manufacturing operations across nine facilities in six countries, serving 35+ OEMs and Tier 1 customers.

• Strategy centers on integrating acquired operations, expanding engineering and product-development capabilities, and moving toward full-service supplier and OEM development-partner roles.

• Consolidated results include newly acquired subsidiaries for the first time; reported growth therefore reflects both acquisitions and organic performance.

Financial highlights

• FY05/06 consolidated net sales and operating income rose 51% to Rs 30,189 million; EBITDA increased 37% to Rs 5,889 million.

• Consolidated PAT grew 25% to Rs 2,505 million; basic EPS was Rs 11.51 versus Rs 9.96 in FY04/05.

• Consolidated total revenue was Rs 30,851 million versus Rs 20,014 million; PBT was Rs 3,925 million versus Rs 3,130 million.

• Standalone total revenue rose 33% to Rs 16,310 million; PAT increased 28% to Rs 2,070 million and EPS to Rs 9.50 from Rs 7.93.

Outlook and guidance

• FY06/07 outlook anticipated improved profitability as new capacity and orders ramp up and utilization increases.

• A further 40,000 MT of forging capacity was planned to come on-stream at Pune in FY06/07; non-auto revenue share was targeted to rise from 17% to 20–25%.

• Target remained to reach US$1 billion in revenue by 2008; market outlook was positive across India, Europe, the US and China.

• Talent recruitment and retention, technology development and global integration were identified as key execution priorities.