Bharat Forge hosted
a conference call on May 8, 2024. In the conference call the company was
represented by, Mr. Amit B Kalyani- Deputy Managing Director, Mr. Subodh
Tandale- Executive Director and Mr. Kedar Dixit- Sr. VP & CFO.
Key
takeaways of the call
In
FY24, the company reported strong performance driven by execution on defence
export order and the continued strong ramp-up of exports business across all
business segments except Oil & Gas.
The
company’s group’s defence business recorded revenues of Rs 1,561 crore, a near
4X jump as compared to FY23.
The
company secured new orders worth Rs 4,494 crore across artillery systems, armored
vehicles and consumables. The executable order book stands at Rs 5192 crore as
of March 31, 2024.
In
Q4 FY24, EBITDA margin increased driven by improved product mix.
In
Indian automotive business, the company reported mild revenue accretion in its
CV business. Management intends to growth is in-line with the market, which is likely
to see more activity as the election process concludes and Capex spend
accelerates.
The
premiumization trend in the PV segment continues, with Utility vehicles now
accounting for more than 50% of the sales. Growing disposable income is likely
to keep the overall premiumisation trend intact.
Export
CV business remained steady in FY24 with revenue up 8.5% YoY. Order backlog,
inventory and cancellation rates remain at reasonable levels.
Going
ahead, North America Class 8 production is likely to remain flat with a
moderately negative bias in CY24. Though inflationary pressures have abated in
Europe, sustainable recovery remains elusive. BFL remains well placed to
outperform the overall market.
PV
export revenues in FY24 stood at Rs 1269.4 crore, up by 33% YoY. Market share
gains, increased geographical footprint and value addition continued to drive
the stellar performance. The company continues to deepen its client portfolio
and diversify across geographies.
The
Industrial segment domestic revenue increased 72% YoY in FY24. The sharp rise
was driven by supply of components & products for defence application.
Apart from defence, green shoots in private capex around Sugar, Cement and
Steel continue to aid demand for the industrials vertical.
Industrial
segment export revenue ex Oil & Gas was up 35% YoY primarily due to strong
performance in construction & Mining, Aerospace, Defence and Railways.
In
FY24, the industrial casting vertical secured new orders worth Rs 460 crore.
Over the past 2 years, the business has made tremendous progress in reducing
its customer and sector concentration and has developed a more balanced
business mix across Automotive, Construction & Mining, Hydraulics &
Wind energy.
The
company intends to focus on building new relationships within the Industrial
space targeted at Construction & Mining, Railways, and Aerospace etc.
In
FY24, the Indian operations have secured new orders worth Rs 1350 crore across
automotive & industrial applications. This includes a healthy mix of
existing and new customers across traditional & new products.
The
company has set up an AI/Digital manufacturing center, which will catalyze the
engineering/ manufacturing activities and enable improvement in productivity
and shorten time to market products.
Management
expects FY25 to be a year of growth driven by Defence business, Industrial
casting business and continued improvement in capacity utilization of the overseas
business.
In Q4 FY24,
America contributed 63% to total revenue, Europe 30% and Asia 7%.
The
balance sheet continues to remain robust, with cash (Net of LTL) of Rs 815
Crore.
Board recommended a final dividend
of Rs 6.50 per equity share of the face value of Rs 2 each (at the rate of
325%) for the financial year ended March 31, 2024. The final dividend, if
approved, will be paid on or after August 14, 2024.
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