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Aluminium forging capacity to triple going forward with new plants, says Bharat Forge

Updated : June 19, 2019 11:23 AM IST

Pune-based Indian multinational company, which deals with automotives, power and oil and gas, is looking to set up an aluminium forging plant in the US, which will be operational by 2021. With this, the company aims to increase its aluminium forging capacity three times.

Slowdown concerns continue to hit Bharat Forge. CLSA has reiterated its 'sell' call on the stock and cut the target to Rs 390 from Rs 420.

Amit Kalyani, executive director of Bharat Forge, said the US commercial vehicle (CV) market should grow in low-single digit this year, while the Indian market should be flattish with a weak first half and a much stronger second half driven by the pre-buy effect of BS-VI implementation.

“In addition to existing portfolio and business that we have on the commercial vehicle side, we will be launching new products on the transmission and driveline side as components which we are exporting to global companies,” he added.

Talking about the North American market, Kalyani said, “The market is expected to be in the region of 2-3 percent growth for this calendar year over last year which was a strong year.”

Speaking about electric vehicles, he said, “We have planned our EV strategy in phases. In the first phase, we are already engaged on existing products, existing technologies which means forged and machine products.”

“We have in the process an additional expansion phase in our German plant which will come online in 2020 and start generating revenues in 2020,” added Kalyani.

On the industrial export front, Kalyani said, “Last year was a record year for industrial exports largely on the back of oil and gas. Today, the oil and gas companies have a high inventory level as far as components for fracking and drilling with the US.”

“We expect destocking to happen in Q1 and slightly in Q2 and there is a lot of geopolitical uncertainty; countries are now buying oil selectively from certain countries. So this all has a lot of uncertainty around it. So while there is a slight slowdown, I do not think it is going to be a very dramatic slowdown,” he added.
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