Mumbai: The world’s second largest forging company by revenues, Bharat Forge Ltd, said its net profit for the quarter ended 31 March fell 20.5% to Rs63.6 crore, as it posted a foreign exchange loss of Rs15.8 crore.
Sales rose 3.7% to Rs1,149 crore for the fourth quarter from Rs1,109 crore a year ago.
For the full year, net profit was up 2.6% to Rs290.8 crore, while sales rose 11.3% to Rs4,652 crore as Bharat Forge’s export revenues rose 28% (in rupee terms) to Rs961 crore.
During the year, the company also had a one-time gain of Rs30.3 crore after selling its interest in a German unit.
“The year 2008 has been full of challenges on both the domestic and export front. Two of our major markets witnessed a slowdown which was compounded by the appreciating rupee,” B.N. Kalyani, chairman and managing director, Bharat Forge, said in a statement.
Companies that export tend to find that an appreciating rupee means they get less when they convert their dollar billings into rupees.
Domestically, vehicle sales fell 4.7% in the fiscal ended March, while a slowdown in Bharat Forge’s key US commercial vehicle market is also hurting profits. Moreover, the rupee appreciated 7.93% against the US dollar in fiscal 2008, hurting earnings from exports, half of which comes from the US market.
The company has signed a memorandum of understanding with NTPC Ltd to set up a joint venture company to make power plant equipment.
The company is also building a new unit to focus on the aerospace, marine and rail, power, energy, mining and construction equipment industries. Bharat Forge plans to raise another Rs400 crore through rights issue of debentures to fund its expansion plans.
Shares of Bharat Forge fell 0.9% to close at Rs296.3 on the Bombay Stock Exchange on Tuesday.