The industrial segment saw a 23% revenue decline due to depressed capex and low underlying demand within oil and gas, construction and mining sectors. “The anemic global growth over the past year and lower cost of drilling due to emergence of new technology like fracking had led to excess supply in the market causing prices to decline 80% and forcing companies to cut cost and put capital investments on hold. This has impacted BFL’s business and FY16 revenues declined 50% with more pain to come in FY17,” Kalyani said.
As a result, the growth in the domestic market was negated by a weakness in the international markets, so total revenues declined 5.3% to Rs 4,305.40 crore and PAT fell marginally to Rs 701.10 crore in FY16. Previous year, PAT was Rs 719 crore.In the automotive segment, the company was impacted due to the volatility in the North American Class 8 truck markets. But the passenger segment performed well in FY16 with export revenues growing 87% and this segment contributes 10% to the overall revenues. “The growth trajectory in the passenger car market is expected to continue in India as well as North America and Euro region. A steady ramp-up of existing orders would contribute to another year of growth for the company,” he said at the company AGM. BFL has seen a 28% growth in the domestic M&H CV segment and is expected to register growth in FY17 because of buying ahead of the complete roll-out of BS-IV norms and increased investments in infrastructure projects.Bharat Forge reported a 37.7% fall in PAT to Rs 122.1 crore for Q1 FY17 while revenues declined 19.3% to R 957.10 crore. The company attributed this fall to the continuing weak demand in the oil and gas space along with a severe downturn in the North American truck market. While there has been a growth in the domestic market, this has not been enough to compensate the fall in the global business. Domestic revenues are up 10.8% to Rs 5,33 crore while export revenues were down 40% to Rs 407 crore. BFL’s sales in the North America truck market declined 47% to Rs 126 crore in Q1 FY17.The company said the phase of sequential decline is behind the company and it anticipates demand to improve in the next quarter riding on growth in the domestic automotive and industrial segment. The BFL share price rose 13.43% on the BSE on Friday to Rs 820.70.