Bharat Forge Ltd. Business Report FY ended Mar. 2017
Financial Overview
-In the fiscal year ended March 31, 2017, the Company's consolidated sales down by 5.8% at INR 65,981.6 million compared to INR 70,015.6 million in the previous fiscal year. The Company's sales were negatively affected due to weak export demand and disappointing growth in the Indian M&HCV space.
-The Company’s EBITDA of INR 12,717.8 million in the fiscal year ended March 31, 2017 down by 12.1% to the EBITDA of INR 14,475.8 million in the previous fiscal year. EBITDA percentage declined by 300 bps from 30.1% in FY 2015-16 to 27.1% in FY 2016-17 on the back of decline in total income.
-In the fiscal year ended March 31, 2016, the Company's consolidated sales remained flat at INR 77,801 million compared to INR 77,589 million in the previous fiscal year. The Company's sales were negatively affected due to the slowdown in the North American Class 8 truck market. However, growth in the passenger vehicle segment offset those losses.
-The Company’s EBITDA of INR 14,745 million in the fiscal year ended March 31, 2016 remained level compared to the EBITDA of INR 14,750 million in the previous fiscal year. EBITDA margins were also flat at 19.3% as the increase in project related costs were negated by favorable input prices.
Restructuring
-During the fiscal year ended March 31, 2017, the Company divested its 49% stake in Joint Venture with Alstom, Alstom Bharat Forge Power Private Limited (ABFPPL).
-During the fiscal year ended March 31, 2016, the manufacturing operations of CDP Bharat Forge GmbH were transferred to a new subsidiary company in Germany called Bharat Forge CDP GmbH (BF CDP).
-In the fiscal year ended March 31, 2016, Bharat Forge Aluminiumtechnik GmbH & Co. KG was changed from a partnership firm to a limited liability company named Bharat Forge Aluminiumtechnik GmbH.
Divestiture of stake in hybrid system joint venture
-The Company divested its 50% stake in the joint venture Impact Automotive Solutions Limited to its joint venture partner, KPIT Technologies Limited. Impact Automotive Solutions was formed in 2010 for the development and manufacturing of automotive hybrid solutions. The Company's stake was sold to KPIT Technologies for INR 108 million. (From an announcement on September 8, 2014)
Contracts
-During the fiscal year ended March 31, 2017, the Company has secured US$ 120 million worth of new business wins spread across geographies and business verticals. A majority of these wins are for new products developed over the past 2 years.
-The Company announced that its German subsidiary Bharat Forge Aluminiumtechnik GmbH & Co KG (BFAT) has won a multi-year contract approximately worth EUR 250 million from a German OEM for the supply of suspension components. BFAT will add a new press line to produce additional components for this contract. (From a press release on May 8, 2014)
Outlook
-The Company plans to double its standalone revenue from INR 34 billion of fiscal year ended in March 2014 to INR 70 billion by the fiscal year ending in March 2018.
-The Company will establish a core platform for Smart Manufacturing under an Industry 4.0 program.
Awards & Recognition
-In Feb. 2017, Bharat Forge was awarded Daimler Supplier Award 2016 for the international supply of best quality crankshafts and front axle beams in the Global Procurement Trucks and Buses section.
-In April 2017 , Bharat Forge was named a GM 2016 Supplier of the Year by General Motors during its 25th annual Supplier of the Year awards ceremony.
-In July 2016, Bharat Forge was awarded a Certificate of Recognition from General Motors by ensuring competitiveness for GM’s Global Business.
R&D Expenditure |
(in million INR) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall |
333.4
|
396.1
|
421.4
|
R&D Activities
-In the fiscal year ended March 31, 2017, the Company's R&D activities focused on the development of additive manufacturing, Technology development for cold and precision forging, Development of parts for electric vehicles through economical manufacturing process, Aluminum forgings for MPV and gear box assembly for large vehicles.
During the fiscal year ended March 31, 2017, the company imported technology for design , machining & Assembly of Aluminum Impellers for turbocharger.
-In the fiscal year ended March 31, 2016, the Company's R&D activities focused on the development of additive manufacturing through technologies such as 3D printing, electron beam welding, laser welding, metal injection molding and nanotechnology. The R&D team is working on various projects, including developing technologies that reduce the Company's carbon footprint, manufacturing lightweight products, and lowering energy consumption.
Patents
-During the fiscal year ended March 31, 2017, the Company filed 10 patent applications. The Company has filed a total of 34 patents in its lifetime.
-During the fiscal year ended March 31, 2016, the Company filed 12 patent applications. The Company has filed a total of 22 patents in its lifetime.
Investments outside India
-In August 2016, the Company acquired shares of its UK-based subsidiary, Bharat Forge International (BFIL), from Bharat Forge Global Holding GMBH for USD 4,544,000. Consequently, BFIL has become a wholly owned subsidiary of the Company.
-In December 2016, the Company acquired 100% of Walker Forge Tennessee LLC & PMT Holdings Inc. USA (WFT) for USD 14 million through its U.S. subsidiary, Bharat Forge America Inc. USA. WFT is a leading supplier of complex and high alloy steel engine and chassis components to a diverse group of customers across the automotive and industrial sectors.
-The Company's subsidiary, Bharat Forge Aluminiumtechnik GmbH & Co. KG (BFAT), is increasing its production capacity due to a new EUR 250 million contract to provide suspension components for a German OEM. BFAT is adding a new press line with auxiliary equipment and capabilities including melting. The new press line will be commissioned in January 2015 and will be set up in the state of Saxony at Brand-Erbisdorf. A total of EUR 31 million will be invested into the new line. (From a press release on May 8, 2014)