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Industrial Products India, Industrial Manufacturers & Suppliers
 




 
   
 
 
 

Bharat Forge prepares for another..

Bharat Forge prepares for another round of aggressive growth


Bharat Forge, a leading global forgings maker, having achieved a turnaround of its overseas subsidiaries particularly its Chinese JV, FAW Bharat Forge (Changchun) Co Ltd., is now eyeing another round of aggressive growth.
In the past few years, the Rs 2,996 crore forgings major focused on rationalising operations to break even at lower capacity utilisation. It now sees the need to expand specific capacities for automotive operations, with capacity expansion requiring investments of around Rs. 300 crore in a phased manner over the next two years. The company's annual report has noted that this capacity expansion will be for both, the press line and machined products. Given last year's performance, which has strengthened the company's balance sheet, it could leverage its balance sheet for another round of aggressive growth.
Now positioned as a components supplier to the automotive, industrial and capital goods sectors, Bharat Forge has launched a wholly-owned subsidiary to provide EPC services to power plants. Thisubsidiary has already secured work for three 150 MW power plants, valued at Rs. 1,885 crore,which has to be executed in two years.
One of the two JV s which Bharat Forge has with the French power company Alstom, has emerged as the lowest bidder for the supply of five super critical turbine generators of 660 MW each for NTPC. This is the JV in which Bharat Forge holds a 49% stake, where it expects the value of the work to be worth around Rs. 4,400 crore, the largest ever power contract in India. The JV is also pursuing other IPP orders including a 9x800 NTPC bulk tender.Noting the turnaround of the Chinese JV, FAW-BF, the annual report notes that this was achieved through a focused approach including new product initiatives, manpower rationalisation and asset utilisation. The JV is now expected to grow, given the strong domestic (Chinese) demand, coupled with productivity improvements and continued cost reduction.

However, sounding a note of caution, the company has maintained that inflation and rising commodity prices could play spoilsport. With central banks raising interest rates to curb inflation, the risks are that the higher cost of finance will affect consumer demand and impede future investments, leading to a slowing down of growth. Profit margins could be impacted due to higher input costs, the annual report further noted.


 
     
 
   
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