Automotive component maker Bharat Forge Ltd's has recorded a drop of 54 per cent in its net profit at Rs 47.5 crore as compare to Rs 103.13 crore last year. The company has also witnessed a decline of 28.5 per cent in revenue at Rs 672.6 crore as compare to Rs 941.17 crore last year.
The demand drop coupled with inventory destocking at OEM level led to decrease in capacity utilization in Q3 FY13. We undertook manufacturing cuts to reduce inventories and match our production levels with the new demand environment. The non- automotive business, which has been a key growth driver over the past 2 -3 years was also impacted by reduction in demand globally for infrastructure related products and solutions, company said in a statement.
Commenting on the results of the company B N Kalyani, chairman and managing director said “On the back of continued weak and uncertain macroeconomic fundamentals globally, the company witnessed a sharp drop in demand across all sectors, customers and geographies in the export market in addition to the continued weakness in the domestic market."
"We have initiated series of measures aimed at tight cost control and productivity improvements which has given some benefit in the quarter but we expect the full benefit to flow in the coming quarters. The overall macro environment is volatile with still a lot of uncertainty. However, at this point we expect demand in the 4th quarter to continue at the same level as the previous quarter but still lower year over year” he added.