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earnings | IST

Don’t see production loss due to chip shortage: Baba Kalyani

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Auto components major Bharat Forge posted a good set of Q1 earnings with the company clocking in a beat on both the revenue and net profit front. The company's EBITDA margin has also expanded 100 basis points sequentially, despite cost pressures. The company posted a consolidated net profit of Rs 153 crore for the first quarter ended June 30. Revenue from operations rose to Rs 2,108 crore in the June quarter as against Rs 1,154 crore in the year-ago period.

Auto components major Bharat Forge posted a good set of Q1 earnings with the company clocking in a beat on both the revenue and net profit front. The company's EBITDA margin has also expanded 100 basis points sequentially, despite cost pressures.
The company posted a consolidated net profit of Rs 153 crore for the first quarter ended June 30. Revenue from operations rose to Rs 2,108 crore in the June quarter as against Rs 1,154 crore in the year-ago period.
On chip shortage, Baba Kalyani, CMD of Bharat Forge, said, “It is a pretty universal phenomenon. There is a shortage of chips all over the world. But I think most OEMs are taking adequate steps to deal with it. Some are losing some amount of production, but I don't think that is causing a big loss in production.”
He further added, “I think what is really happening is that the production of the lower end passenger car vehicles is going down and the production is shifting towards higher-value products. So all in all, yes, it is a shortage, but I think it is really not in anybody's control.”
On margins, Kalyani said, “We have done a lot of work in the last two years on getting our costs down, despite COVID. Downsizing, getting our working capital down, so we have done a lot of work internally, with IoT, digital, to get a more productive enterprise to operate and I think that is what is really showing in our margins. Like everybody else, we would like to improve the margins. But I think we are at a pretty healthy margin level right now, and every time we have gone through a downturn, we have always come out stronger.”
He said, “I think, as you can see, we are hungry for growth, we have a strong balance sheet, we have a lot of cash on our balance sheet, we have a pretty strong performance going on. So, I think we are looking at areas and opportunities where we can grow. But we have to grow in businesses that have relevance for the future, not relevance for yesterday, but more for tomorrow.”
“So, of course, we have done a lot of string of pearls type investments in technology space connected with electric vehicles and mobility. We have invested in a couple of start-ups, I think that is going to start showing some results, going forward, in a year or two. We are going to invest in areas like renewables because I think that is the future as far as energy is concerned and there is a lot of opportunity in that space,” he said.
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