Amit Kalyani, Executive director of the company addressed the call.

Highlights of the call

FY 2019 was a record year for the company.

In FY 2019 the Passenger vehicle & two wheeler segment posted modest growth whereas the Commercial vehicle, three wheelers and Tractors segment posted healthy double digit growth in volumes.

H1 saw robust performance in the automotive space however performance in the second half remained fairly subdued.

M&HCV segment saw quite robust growth in the initial months but started declining from October 2018 onwards. This was due to tightening financing environment, surplus capacity created through revised axle load norms, higher fuel cost and weak freight rates.

In a subdued underlying market, revenues from the passenger car segment in FY 2019 grew by a strong 16.2%.

In FY 2019, BFL recorded its highest ever revenues from the India Commercial Vehicle segment at Rs 1098.8 crore.

In FY 2019, sales volumes for FY 2019 of M&HCV segment grew 15%.

In FY 2019, sales grew 16% to Rs 6159. crore. OPM grew 200 basis points to 30.9%. Thus OP grew 24% to Rs 1906.10 crore. PBT went up 28% to Rs 1623.08 crore.

In FY 2019, consolidated sales grew 21% to Rs 10145.73 crore. OPM fell 30 basis points to 20.3%. Thus OP grew 19% to Rs 2055.57 crore. PBT went up 25% to Rs 1610.36 crore.

In March 2019 quarter sales jumped 14% to Rs 1668.60 crore. OPM grew 250 basis points to 31.0%. Thus OP grew 24% to Rs 517.28 crore. PBT jumped 29% to Rs 453.77 crore.

The company continued to strengthen the balance sheet with all key financial ratios improving compared to FY2018.

In FY 2019, the company secured orders worth 50 million across sectors and geographies. An encouraging trend is the large part of the order is on new product development.

Around 60-70% of new order wins are from new sectors and new products.

The company continues to develop a strong order pipeline which it hopes to convert in the coming year.

The Centre for Light Weighting Technology at Nellore is expected to come on stream in the coming few months. In the 1^st phase, the facility will manufacture critical light weight components in Aluminum. Having already secured contracts, this facility is expected to provide a fillip to growth as it gradually ramps-up.

Nellore plant will focus on existing Bharat Forge's forging and machining business. It will target complex high value and high value added components mostly chassis components. This plant will not have any aluminum business.

After a strong two year performance wherein the company delivered 30% & 35% CAGR topline & profit growth, it is starting to witness demand flattening out in the export markets.

The sluggish export market is compounded by the lack of momentum in the domestic market across sectors.

The management expects the situation to improve in the coming months.

The company will focus on navigating through the challenging demand environment, utilizing a combination of accelerated new product development and cost optimization.

In FY 2020, the demand environment is expected to be weak in Q1 but should revive going forward.

Tailwind is expected from pick-up in infrastructure development and potential pre-buying ahead of the implementation of BS-VI emission norms from 1^t April 2020.

Volatility in demand could be the norm in the CV space in FY20 as the players will try to ensure no significant pile up of inventory and smooth change over to BS VI compliant vehicles.

The company continues to focus on new product development and increase content per vehicle in the M&HCV space.

In the passenger vehicle segment, the company has made significant progress on new product development.

New products have helped in adding new customers and also increase its share with existing customers.

The company recorded strong growth in all the sectors of the Industrial business it operates in with defence, agri and infrastructure related sectors contributing the strongest growth. In FY 2019, industrial segment recorded its highest revenues of Rs 1009.4 crore, up 28%.

Exports in FY 2019 grew 25% to Rs 3725.80 crore.

The US Class 8 market remained strong throughout CY 2018 and grew strongly by 27% on the back of a strong economy and solid freight demand. Order activity has moderated in the initial months of CY 2019 but is expected to normalize going ahead H2 compared to last year's record numbers. This year is expected to show modest increase in production on account of a robust build schedule and order backlog.

It is very difficult to project how class 8 truck will be in FY 2021.

The Oil & Gas industry in North America witnessed another good year of increased activity and output supported by the shale gas industry. BFL continues to expand product offerings and has been successful in adding new customers, increasing share with existing customers and winning new orders across the segments it operates in.

Global economic uncertainty, volatility in crude oil prices and bottleneck issues in transportation of shale output is starting to adversely impact production activity.

RoE net of cash improved to 24.7% from 22.5%.

Long term debt is Rs 1935 crore and Cash is Rs 1836 crore. So net debt is less than Rs 100 crore.

Going forward, capex intensity will go down significantly and the company will focus on sweating its assets. From FY 2019-2020 project capex will be Rs 850 crore plus there will be Rs 400 crore of maintenance capex

The company refused to give details on O&G revenue and said that they will stop giving segment wise revenues as there is scrutiny of the same and the information is also misused. The company had the highest ever revenues from O&G. O&G is only exports business and accounts for less than 40% of the overall revenues.

The company is also focusing on electric vehicles but will wait for couple of months to talk on the same.

From BS 6 standpoint, CVs will see around Rs 1000 increase in price per vehicle.

Transition from Euro 4 to Euro 6 has taken 6-8 years globally.

Most of the CV companies are going for electrification.

Agriculture has slowed down a bit but is expected to improve now as the elections are over.

Defence business has been doing well despite it not getting any orders from the large projects it is working on. The orders should come next year and a year later it should convert into significant revenues.

In FY 2019 sales from domestic and exports sales for defence and aerospace was Rs 440 crore and Railways was Rs 80 crore.