Bharat Forge Q1 net profit anticipated down by 20%

This morning Bharat Forge saw a rise of 40.05 points and opened at Rs. 721.40 touching an intraday high and low at Rs. 772.90 and 719.10 respectively. The stock saw a rise in volume by more than 5.41 times.

The company announced the Unaudited Standalone results for the Quarter ended June 30, 2016. Bharat Forge, the automotive products manufacturer first quarter (April-June) profit is seen slip 20 percent Y-o-Y to Rs 157 crore and revenue falling 12 percent to Rs 990 crore, as per average of estimates of analysts polled by CNBC-TV18. Topline reduction may be because of weak auto exports and stagnant industrial segment. Shipment tonnage is anticipated to decline 1.2 percent Y-o-Y to 51,365 tonnes because of inventory destocking in the US truck market. Management already guided for a slow quarter, which said Q1FY17 demand will be uncertain than Q4FY16. Big slowdown in revenue growth in FY16 was driven by lack in exports that may continue in Q1FY17, feel analysts.

Bharat Forge share price is trading at Rs. 765. As per NSE a total of 32 lac shares exchanged hands.North America class 8 Truck orders have been shaky for the past 8 consecutive months, slipping from 27,800 in December 2015 to 13,000 units in June 2016. In June, class 8 truck orders fell to lowest level since 2012 at 13,000 units. Bharat Forge receives around 30 percent revenue from North America truck market. Lower commercial vehicle growth in domestic market can also affect revenue for the quarter. Net realisation is likely to dip around 10 percent Y-o-Y to Rs 1.94 lakh per tonne. Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) will hopefully slip 18 percent to Rs 285 crore and margin may shrink by 160 basis points to 29 percent on yearly basis as per negative operating leverage and weak product mix.

Bharat Forge is one of the Top 500 Shares recognized by Dynamic Research team for this quarter out of the 1700 share listed on NSE. The 52 high week of Bharat Forge share price is observed at Rs. 1293.00 (20-Aug-15) while the 52 week low reads at 682.00 (24-Jun-16).For further information refer to Bharat Forge share price forecast.