Bharat Forge Ltd. Business Report FY2009

Business Highlights

Financial Overview (FY2008-09)

-Total income increased by 1.9% from Rs. 47,516 million in FY2007-08 to Rs. 48,427 million in FY2008-09.
-EBITDA margin in FY2008-09 was 10.8% ; and EBITDA was Rs. 5,214 million.

Exports Revenue (on a stand-alone basis)

(in million Rs.)

	FY2008-09	FY2007-08	Rate of change
Total income	21,064	22,849	(7.8%)
Exports revenue	10,014	9,610	4.2%
Total exports revenue as a % of total income	47.5%	42.1%	-

-During the year under review, exports turnover of the Company crossed Rs. 10 billion mark for the first time.

By Region

<India>
-The Indian automobile industry also witnessed a significant slowdown in the second half of 2008-09. The slowdown was mainly in the CV segment, which is BFL's primary market.

<USA>
-The US, was traditionally BFL's largest export market. However, exports to US fell by 10.2% from Rs. 4,855 million in FY2007-08 to Rs. 4,359 million in FY2008-09. Consequently, now Europe has overtaken US as the largest export destination for BFL.

-BFL has continued to explore opportunities outside the commercial vehicle chassis space with special emphasis on heavy duty engine parts for commercial vehicles, non-automotive forgings and greater penetration into the passenger vehicle segment.

<Europe>
-BFL serves the European market through exports from India as well as through local facilities.

-Bharat Forge Kilsta (BFL) and its subsidiary Bharat Forge Scottish Stampings Limited (BFSSL) were the worst affected as they are predominantly in the CV segment where the European market has crashed.

-CDP-BF, the German subsidiary has also been affected but to a lesser extent due to presence across CV, Passenger vehicles and Non-auto.

-In terms of exports from India, BFL managed to record moderate growth of 14.7% from Rs. 4,299 million in FY2007-08 to Rs. 4,933 million in FY2008-09.

<China>
-BFL caters to the Chinese market through exports from India to a small extent and through its joint venture with First Auto Works (FAW) Corporation. BFL holds a 52% stake in this JV.