About
Bharat Forge Ltd
Bharat Forge Ltd (BFL), the Pune based Indian multinational, is a global provider of high performance, innovative, safety & critical components and solutions to various industrial sectors including Automotive, Railways, Power, Defence, Construction & Mining, Aerospace, Marine and Oil & Gas. The company is a part of Kalyani Group. The Company is engaged in the manufacturing and selling of forged and machined components including aluminium castings for the auto and industrial sectors. It operate manufacturing facilities at Mundhwa, Baramati, Chakan, Satara and Nellore locations.
Bharat Forge Ltd was incorporated in the year 1961. In the year 1996, the company commenced commercial production. In the year 1995, the company commenced exports to erstwhile USSR by winning a large contract for under carriage components. In the year 1990, they made investment in state-of-art forging technology. Also, they commissioned 16000 MT press line. In the year 1991, the company commenced supply of engine & chassis components to Japan, USA and UK.
In the year 2001, the company commissioned their second 16000 MT press line. Also, they acquired the order book of Dand Kirkstall. In the year 2002, they made investment of $ 80 million in Research & Development, Testing & Validation and state-of-the-art Heavy Duty Truck Crankshaft Machining facilities. In November 21, 2003, the company acquired Carl Dan Peddinghus GmbH & Co. KG (CDP) of Germany and with this acquisition, the company emerged as world's second largest forging company. Also, they acquired Imatra Kilsta AB, Sweden & Scottish Stampings, Scotland.
In the year 2005, the company signed a joint venture contract with FAW Corporation for their forging business. In September 21, 2005, the company through their wholly owned subsidiary, Bharat Forge Beteiligungs GmbH, Germany, acquired Imatra Kilsta AB, Sweden along with its wholly owned subsidiary, Scottish Stampings Ltd, Scotland (together called Imatra Forging Group), which are now renamed as Bharat Forge Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Ltd, respectively. Also, they acquired Federal Forge now known as Bharat Forge America Inc., which provided the company with a manufacturing presence in USA, one of their largest markets.
In the year 2006, the company made investment of $ 100 million to set-up dedicated state-of-the-art forging & machining facilities for non-auto components. In the year 2008, they signed an MoU with NTPC. In August 2008, they commissioned India's Largest Commercial Open Forging Press. Also, the company in association with Alstom formed a joint venture in Indian to manufacture state-of-the-art super critical power plant equipment. In March 2009, the company started operations in the new state-of-the-art 80 Mtr-T counterblow hammer in Baramati for production of heavy forgings for large diesel engines and aerospace applications as well as Machining line for heavy duty.
During the year 2009-10, the company incorporated a joint venture (JV) company, BF-NTPC Energy Systems Ltd (BFNESL), with a 51% equity interest held by the company and balance held by NTPC Limited for the manufacture of critical items of Balance of Plants and other equipment for which India still remains dependent on imports. Also, the company set up two joint venture companies in partnership with ALSTOM Power Holdings S.A. for manufacturing sub-critical and supercritical thermal power plant equipment. The two JV companies named ALSTOM Bharat Forge Power Ltd and Kalyani ALSTOM Power Ltd will manufacture turbine and generators for power plants in the 300- 800 MW range and auxiliaries like heat exchangers, condensers and deaeraters, respectively.
During the year, the company entered into Preliminary Joint Venture and Shareholders' Agreement with AREVA NP, France, to create a manufacturing facility for heavy forgings and castings for the power sector particularly Nuclear Power segment and other heavy industries in India. In January 2010, the first phase of the capacity creation plan for the non-auto components business was completed with the commissioning of the ring rolling facility at Baramati. Also, they established Kalyani Centre for Technology & Innovation.
During the year 2010-11, the company commissioned new vertical heat treatment facility for manufacture of Turbine and Generator Rotors alongwith thermo stability test facility. Also, Ring Rolling Mill in BARAMATI became fully operational and became a supplier of critical rings for different customers specially for Gear Box manufacturers. Also, they company made an additional investment of Rs 150 crore in expanding machining line further for crankshaft machining in Baramati.
In 2012, the companie's power equipment joint-venture with Alstom bags Rs. 1,570 crore order from NTPC Ltd.
In 2013, NTPC orders three supercritical turbine islands from Alstom-Bharat. Bharat Forge, Alstom Power JV bags Rs 2,251 cr order from NTPC.
In 2014, there was a amalgamation of Joint Venture Companies -'Safran and Bharat Forge to form partnership to address opportunities in Indian civil and military aerospace'. The Kalyani Group Sign a Strategic Partnership for the Air Defence of India
In 2015, High Tech Rail Component Manufacturing Facility at Bharat Forge Centre for Advanced Manufacturing, Baramati was inaugurated. Also during the year, production began at Alstom-Bharat Forge's new turbine and generator manufacturing facility in India. The company awarded Recognition Prize - Energy Efficiency Award 2015. Also during the year, the company announced the acquisition of Oil & Gas Machining Company, Mecanique Generale Langroise (MGL) in France. During the year, Bharat Forge formalized a significant supply agreement for long term co-operation with Rolls-Royce. On 17 February 2016, Boeing and Bharat Forge (BFL) announced the first shipment of titanium flap-track forgings made by the Indian supplier for Boeing's Next-Generation 737. Bharat Forge will also supply forgings for the 737 MAX, scheduled to enter into service in 2017. The companies continue to address opportunities to expand BFL work in support of Boeing and its supply chain partners around the world. BFL also intends to expand its capabilities to offer higher value machining and manufacture of assemblies.
On 29 March 2016, Bharat Forge announced that the company has teamed up with US based AM General LLC to bid for India's Light Specialist Vehicle (LSV) program using AM General's battle-tested HMMWV as the LSV's base platform - with final build and production to take place in India. The teaming between the two companies will lead to providing cost effective and best-in-class mobility solutions for Indian Armed Forces.
On 26 April 2016, Bharat Forge announced that Boeing has awarded a contract to the company for titanium forgings for the Boeing 777X. The titanium forgings will be developed and manufactured by Bharat Forge using a closed die forging process.
On 7 June 2016, Bharat Forge announced that its joint venture with GE viz. Alstom Bharat Forge Power Private Ltd. (ABFPPL) has won a contract worth $219 million approximately from NTPC. ABFPPL will supply two units of 800 MW ultra-supercritical Steam Turbine Generator Islands, on EPC basis, along with related civil work for the Telangana Super Thermal Power Project Phase-1.
On 8 November 2016, Bharat Forge announced that its Board of Directors has approved divestment of its 49% stake in the power equipment JV with Alstom, Alstom Bharat Forge Power Private Limited (ABFPL) for US$ 35 million. The JV incorporated in Delhi with its manufacturing facility at Sanand was formed in 2009 to address opportunities arising from the expansion in the Indian power sector.
On 18 November 2016, the Finance & Risk Management Committee constituted by the Board of Directors of Bharat Forge Limited (BFL) approved the proposed acquisition of 100% shareholding of Walker Forge Tennessee LLC (WFT) through the company's US subsidiary, Bharat Forge America. WFT is a leading supplier of complex, steel and high-alloy steel, engine & chassis components to a diverse group of customers across Automotive & Industrial sectors. The transaction value is US$ 14 million which will be funded through internal accruals & debt. This proposed acquisition is focused on establishing BFL's manufacturing footprint in North America and on increasing BFL's product offering into the Passenger Car and Commercial Vehicle segments as well into industrial sectors such as Construction & Mining and allied industries. This will also enable BFL to expand its presence in North America.
Kalyani Rafael Advanced Systems (KRAS), a Joint Venture between Kalyani Strategic Systems Ltd., a subsidiary of Bharat Forge, and Rafael Advanced Defense Systems Ltd. of Israel, inaugurated their state-of-the-art facility at Hyderabad on 3 August 2017. KRAS would be India's first private sector advanced defence sub-systems manufacturing entity. Spread across an area of 24,000 sq.ft., the facility will enable production of high-end technology systems for Indian Armed Forces. It will be engaged in development of a wide range of advanced capabilities like Command Control and Guidance, Electro-Optics, Remote Weapon Systems, Precision Guided Munitions and System Engineering for System Integration. The facility will also target to export products to other countries.
The Board of Directors of Bharat Forge (BFL) at its meeting held on 10 August 2017 approved acquisition of the entire remaining 40% stake in its subsidiary company - Analogic Controls India Limited (ACIL). Upon acquisition, ACIL will become a wholly owned subsidiary of the company. ACIL is engaged in the design and development of reliable onboard/ground systems, safety arming mechanism, launcher relay unit, reliable electronic systems and sub-systems for mission critical applications. ACIL offers products and services for mission technologies of national importance in Defence, Aerospace, Communications and Industrial Electronics. ACIL clocked turnover of Rs 7.34 crore in FY 2016-17. BFL, the erstwhile promoters of ACIL and ACIL had entered into a Share Subscription Agreement and Shareholders' Agreements on 23 April 2013 and 18 June 2013 respectively, for acquiring 60% stake in ACIL by BFL.
The Board of Bharat Forge at its meeting held on 10 August 2017 also recommended issue of bonus shares to the holders of equity shares of the company in the ratio of 1:1. Further On October 3, 2017, the Company had issued bonus shares, in the proportion of 1:1 i.e. 1 (one) bonus equity share of Rs 2/- each for every 1 (one) fully paid-up equity share. Accordingly the Company has allotted 232,794,316 Equity shares of Rs 2/- each fully paid-up, to the shareholders of the Company.
On 10 August 2017, Bharat Forge announced that it has secured its maiden order from the Ministry of Defence to supply 1,050 Dual Technology Detection Equipment. The order worth Rs 201.60 crore, will be manufactured in India and is to be concluded within two years.
On 17 January 2018, Bharat Forge announced that it has opened a Research & Development facility in UK, in MIRA Technology Park, the UK's leading automotive technology park and Enterprise Zone, where it will be developing components & sub-systems focused on Electric Vehicles. This facility will complement the capabilities & knowledge established over the past 2 years in Kalyani Centre for Technology & Innovation (KCTI) & Kalyani Centre for Manufacturing Innovation (KCMI) in Pune focused on delivering solutions for Electric Vehicles. On 8 February 2018, Bharat Forge announced strategic investment of upto Rs 30 crore for eventual stake of 45% in an EV startup, Tork Motorcycles. Bharat Forge is making a strategic investment in Tork Motorcycles as a part of its overall E-Mobility powertrain development. Tork's strength lies in its in-house team that has designed, developed and built the complete electric motorcycle. Their knowledge in the overall EV powertrain development will help Bharat Forge gain access to technologies in personal E-mobility space. Accordingly, the Company has acquired first tranche of 30.37%. TORK Motors is an electric drive train company mainly focused on electrical two wheeler and/or premium electric motor cycle.
During the FY2018,the Company has purchased remaining 40% shares of Analogic Control India Limited (ACIL), from its erstwhile promoters. With this acquisition, ACIL became a WhollyOwned Subsidiary of the Company.
Further, during the year the Company has completed the sale of remaining balance equity of 26% in the power equipment Joint Venture, Alstom Bharat Forge Power Private Limited (ABFPPL). With this divestment, the Company has completed its total divestment in ABFPPL.
During the year 2017-18,the Company also incorporated a wholly owned subsidiary in Israel viz. Indigeneous IL Limited with an objective of exploring targets in technology, space and also explore tie-ups with universities/tehnology institutions in further upgrading research and development initiatives in various new technologies.
As on 31 March 2018,the company had 20 subsidiaries and one associate company under its roof.
During the FY2019, the company has generated strong cash flows of Rs 1,225 Million despite committing a Capex of Rs 8,500 Million during the year.
In FY'19, the Company installed the first CLWT machine, a 4200 T die-casting machine which is the biggest in India and the 5th largest in
the world. Besides this, it acquired customers even before completing the plant construction of the CLWT plant.
During the FY2020,the Company promoted and incorporated a wholly-owned subsidiary company in the name of Kalyani Centre for Precision Technology Limited (KCPTL), to carry out manufacturing activities of auto parts.
As on March 31, 2020, the Company has 25 subsidiaries (including step down subsidiaries) and 4 Associate Companies.
Capex incurred in the year 2019-20 amounting to Rs 5,164 Million towards forging and machining capacity in Maharashtra.
In FY'20, the Company executed the commissioning of CLWT plant. It started localizing electric powertrain for intermediate and Light Commercial Vehicle (ILCV) and 9M Bus segment in India.
On July 10, 2020 Bharat Forge Hong Kong (BFHK) Limited, a step down subsidiary of the Group was deregistered and dissolved. The closure of BFHK did not have any material impact on the operations/results of the Group.
On March 16, 2021, the Company invested Rs 0.01 million to acquire 100% stake ln equity of Kalyani Powertrain Private Limited to undertake various initiative for e-mobility business.
On May 06, 2021, the Company invested Rs 0.10 million to acquire 100% stake in equity of BF Industrial Solutions Private Limited (formerly known as Nouveau Power & Infrastructure Private limited) as a special purpose vehicle (SPV) for implementation of approved resolution plan of National Company Law Tribunal (the NCLT) for acquisition of Sanghvi Forging & Engineering limited, Baroda in terms of Insolvency and Bankruptcy code, 2016.
During FY'21, the Company received prestigious order from a major global OEM for forging and pre-machined components. It completed trials for three - Kalyani M4 vehicle, Kalyani Maverick and Mine Protected Vehicle (MPV). Further trials for JV Protective Carbine (JVPC) and FSAPDS were also completed. It was awarded a contract to supply the Kalyani M4 vehicle.
In FY 2022, the Company's subsidiary, Kalyani Powertrain Limited (KPTL) received maiden order for supply of products such as High Voltage High Power DC-DC Convertors, Motor Controllers for 2W applications from an Indian OEM. Its subsidiary company, Tork Motors launched its flagship product line of Electric Motorbike, KRATOS and KRATOS-R which received 2000 orders for these bikes .
In FY'22, the Company in collaboration with NASA JPL developed ventilators (FDA approved for emergency use authorization), in and around Pune, which was in great demand during the pandemic. It acquired erstwhile Sanghvi Forging & Engineering Limited (SFEL) for Rs. 900 million. It completed the capex and commercial production at its aluminum forging facility in North Carolina, US. With this, the Company now has two operational aluminum forgings plants; one in the US and the other in Germany. Its Advanced Towed Artillery Gun System (ATAGS), designed by DRDO, has completed its fifth and final firing trials. Apart from this, the Company signed the SPA to acquire Coimbatore-based JS Auto Cast Foundry India. It bagged new business worth Rs. 10,000 Million in FY 2022, bulk of order wins coming from PV & Industrial sectors.
In FY'22, the Company productionalized and shipped the Kalyani M4 armored vehicle to Indian Army for UN Peacekeeping mission. Its KM4 armored vehicles became the only one in category to complete desert trials at Rann of Kutch. During the year 2022, it diversified into new areas of Command, Control, Communications, Computers (C4) Intelligence, Surveillance and Reconnaissance (C4ISR) by participating and winning the iDex challenge through subsidiaries and partners. It made strategic investments in Tevva Motors Limited, UK, Tork Motors Pvt Ltd, India and established global 50:50 JV, REFU Drive GmbH with Prettl Group, Germany.
During the year 2022-23, the Company subscribed to 26% of paid-up share capital of Avaada MHVidarbha Private Limited on April 19, 2022 and Avaada became an associate of the Company. Kalyani Powertrain Limited (KPL), a WOS of the Company incorporated a WOS in the name, of 'Electroforge Limited' on July 25, 2022 and accordingly, Electroforge Limited was made a step-down subsidiary of the Company.
During 2022-23, the Company acquired Coimbatore-based casting and machining company, JS Autocast Foundry India Private Limited (JSA) effective on July 01, 2022. It commenced commercial production at t its aluminum forging facility in North Carolina, US. The Company through BF Infrastructure Limited (BFIL), its WOS got into a Share Purchase Agreement in Feb' 23 with PNC Infratech Limited and Ferrovia Transrail Solutions Private Limited for purchase of 51% shareholding in Ferrovia. The BFIL's shareholding in Ferrovia increased from 49% to 100%, which resulted Ferrovia becoming a WOS of BFIL and a step-down subsidiary of the Company. The Company transferred its stake held in its WOS, Analogic Controls India Limited (ACIL) and its associate Aeron Systems Private Limited to its WOS, Kalyani Strategic Systems Limited (KSSL), and consequently, ACIL became a WOS of KSSL and a step-down subsidiary of the Company. To further consolidate the defence business, with effect from March 10, 2023, ACIL has merged into KSSL.
Bharat Forge Ltd
Chairman Speech
Dear Shareholders,
It gives me immense pleasure to
address all of you and provide a review
of the year's performance and our
progress towards a stronger tomorrow.
At the outset, I thank each one of you
for the continued encouragement
and support. FY 2023 has been a
challenging year with continued
geo-political tension, impact of which
was visible in the higher energy
and food prices, elevated inflation
across all nations and supply chain
related tightness. Despite this, for
the Company, FY 2023 was a year of
progress on many fronts. Right from
the acquisition of JS Autocast providing
entry into the high potential industrial
casting sector, to securing maiden
exports orders in the defence vertical,
and improving our ESG scores, we saw
it all transpire.
The overall operating environment for Bharat Forge in the past year was stable,
especially in India where the macro-economic scenario was positive despite the global
challenges. India's economy has been resilient in the face of many macro headwinds like
high inflation and interest rate hikes by central banks globally. India's gross domestic
product (GDP) grew by 7.2% in FY 2023, following a robust 9.1% growth in FY 2022, making
it one of the fastest growing economies in the world.
Industry Sustains Positivity
The global automobile industry demonstrated resilience through the year. The North
American automotive markets had a good run with sustained fleet replacement demand and
strong appetite for personal mobility. European automotive markets were broadly subdued,
except for the medium heavy truck segment, which witnessed good volumes.
Domestic demand for passenger vehicles (PV) and medium and heavy commercial vehicles
(MHCV) remained strong, driven by healthy consumer demand and increased industrial
activity. As a result, India emerged the third largest automotive market, surpassing
Japan. Two notable trends are clearly playing out in the domestic automotive market. There
is a growing preference towards premium offerings in the PV market, with more demand for
SUVs/CUVs vis-?-vis small cars. In the E-mobility space, electric two and three-wheelers
have taken off in a meaningful way, driven by FAME II subsidies and tax relief measures by
various state governments. However, the uncertainty on FAME subsidies is an overhang on EV
adoption and is likely to result in consolidation.
A Reflection of the Past Year
FY 2023 was a record year with the Company achieving historical high revenues for the
standalone operations. This accomplishment was on the back of strong growth in key end
markets coupled with successful ramp-up of business in segments such as PV, Aerospace etc.
The standalone business achieved revenue of Rs.75,727 million, reflecting a growth of
21.1%, and PBT grew by 8.3% to Rs.14,398 million. Key milestones for the year were the
export business surpassing USD 0.50 billion in revenues and a sharp increase in the PV
export business which grew by 71% to Rs.9,553 million.
The overseas operations faced a challenging period due to supply chain issues and sharp
jump in input costs. Slower than anticipated ramp-up of new aluminum forgings capacities
in Germany and North America further impacted utilization rates. The business posted an
EBITDA loss of Rs.961 million in FY 2023. We are currently steering the path to
profitability by way of improving capacity utilization, optimizing costs and cost
recoveries from customers.
For the consolidated entity, topline grew by 23.4% to Rs.129,103 million while the
profit after tax declined by 52.8% toRs.5,084 million. The balance sheet continues to
remain strong with cash of Rs.31,405 million on the books and D/E (net of cash) at
comfortable levels of 0.54.
The defence arm, Kalyani Strategic Systems Limited (KSSL), achieved its maiden
breakthrough by bagging an export order of USD 155.5 million for supplying artillery gun
system, which will be an indigenously developed and manufactured product with 100%
intellectual property owned by us. Overall, the defence vertical secured orders worth
Rs.20,000 million, in FY 2023. The forging business secured new orders worth Rs.15,000
million and JS Autocast (JSA) has secured new business worth Rs.3,800 million. These order
wins provide a strong revenue visibility for the coming few years.
Tonnage & Technology
We have always been a Company in motion, looking for the next big growth opportunity.
Our initial breakout moment was way back in the early 90's, when we invested an amount
much bigger than our top line to set up a modern 16,000 Ton press (dubbed "The White
Elephant"). This laid the foundation for the next major pivot which happened in circa
FY 2002-03, when we combined a massive organic growth program in India with a series of
outbound acquisitions. At that time, our revenue was about Rs.6,340 million. In the
following two decades, we have strengthened our presence within the forgings space by
venturing into industrial and PV segments, reinforcing our balance sheet and incubating
various initiatives in sunrise sectors.
The results have been impressive: 20-year CAGR of 14% in sales, 13% in profitability
and shareholder value creation (ex-dividend) of 19% alongside attaining market leadership
position.
This time around, our transformation is centered on moving forward towards products
& systems while simultaneously deepening our presence in the components space. This
will be achieved by leveraging our core strengths, including strong relations with
customers, and expertise in material, metallurgical, and metal forming. With this as the
fulcrum, FY 2024 will witness the Company's progression up the product and system value
chain across verticals with increased emphasis on technology and innovation.
The Defence vertical, incubated in 2011, has successfully graduated from developing
components to sub-systems and full systems. The vertical is progressing ahead with a
capability-driven strategy whereby it is leveraging expertise in metallurgy and material
science and technologies like embedded electronics, control systems, artificial
intelligence, etc. to develop multiple platforms and products. This makes us amongst the
few Indian companies to possess such depth of capabilities, and that too all indigenously
developed.
The overseas businesses, which are facing challenges, have taken a pivot from steel to
aluminum forgings. With our global aluminum forging units now operational, we expect the
benefits to start coming in as they begin to stabilize in FY 2024. The aluminum
investments are key to having a meaningful presence in the light-weighting transition
playing out in the automotive world across traditional and new energy vehicles, and to
improve the overall financial performance of the international operations.
In the Industrial business, the acquisition of JSA has provided us an excellent entry
in the ferrous casting space. JSA's recent acquisition of Indo Shell Mould Limited's SEZ
unit has further enhanced its capacities, positioning it to become an anchor for building
larger business. These acquisitions are enabling an increase in the ability to cross-sell
to our existing customers and also giving us access to new customers in the Industrial
sector. JSA given its reputation with customers and an accomplished management will
witness strong growth in the coming years. Our ambition is to make JSA amongst the top
three casting suppliers in India.
In the Aerospace business, we have leveraged our components manufacturing expertise to
build a value-added portfolio and evolve into a tier-I system developer. We are exploring
opportunities to become a part of the supply chain for global leaders looking to set up
manufacturing facilities for large systems in India under the aegis of Atmanirbhar Bharat.
This business has clear growth visibility for the next two years and is expected to grow
at a steady clip in the future driven by enhancement of customers & product.
The E-mobility vertical, started in 2017, reached a milestone by consolidating all
competencies under our subsidiary KPTL, including strategic investments, joint ventures
(JVs) and the R&D-led knowledge to deliver at scale. This includes investments in
TEVVA for electric trucks, Tork Motors for electric motorcycles and a JV with REFU for
inverters.
KPTL successfully started its first micro-factory in the e-mobility space during the
year, for assembly of E-Bike catering to Tork Motors. It is now preparing to launch an
upcoming repowering micro-factory, that will target electrifying old trucks, a big
opportunity given the Indian government's mandate for old vehicle scrappage. We have
received all certifications and completed mileage goals on test vehicles for this
business. As a part of controlled launch, it has initiated pilot program with select
customers.
We are positioning ourselves in E-mobility with modest investments to gain knowledge,
experience and talent across electronics, mechatronics and drive train components, and
expect traction as the sector grows.
Talent Creation for BFL 2.0
BFL 2.0 is not very different from BFL 1.0. At the core, it is all about customers,
technology, innovation and scaling our capabilities and generating value for our
stakeholders. As our initiatives incubated over the past decade move into the harvest
phase, it necessitates dedicated approach, focus and efforts to understand nuances and
dynamics of the respective verticals. Towards this, we have restructured our new
businesses into subsidiaries or dedicated verticals, and have brought in young, dynamic
leaders and building teams to take forward the vision. Execution competencies have also
been stepped-up with dedicated plants and strengthening the team.
Stepping up ESG: Planet Positive
At Bharat Forge, we have bold ambitions to lead ESG in the manufacturing space and have
set targets for the same. We also believe that ESG is going to become an enabler and
differentiator as we further integrate into the global supply chain across segments.
On the environment front, we are progressing towards our vision of 50% lesser emissions
by 2030, and have defined a robust decarbonization roadmap. In FY 2023, we reduced energy
consumption and entered into renewable PPA for 60.65 MW. We are progressing towards water
positivity by 2030, having reduced our water intensity by another 2% in FY 2023.
Our efforts in sustainable development of communities have been inspirational. Across
100 villages of Maharashtra, we have undertaken scalable measures around education,
health, livelihood and infrastructure development. The impact is evident in improved
literacy and standard of living of villagers. We aim to make these into sustainable green
villages with net zero carbon. To our employees, we are providing a workplace that is
diverse, inclusive and safe, and at the same time rewarding.
One of the key initiatives in our ESG journey and assisting our customers in the
sustainability journey is the use of "Green Steel", manufactured using 100%
renewable energy and 70%+ recycled scrap materials with zero GHG footprint. I am happy and
proud to inform you that BFL has become the 1st company in India to utilize green steel in
its forging operations and supply components to its customers.
Vision 2030: Bigger, Better and Stronger
We firmly believe that we are at the cusp of steady growth in the medium-term which is
going to be truly transformational in our ability to deliver solutions across
technologies, processes and end-markets. As our initiatives in Defence, E-Mobility and
Industrial moves from investing to harvesting phase, and we move from manufacturing just
components to components and products/ systems involving technologies like AI, IoT and
digital Industry 4.0, new opportunities are set to unlock. To this effect, we have put out
a transformational vision target for year 2030.
These include:
• Consolidated revenues CAGR (FY 2022-FY 2030) of 12-15% by creating balanced
income streams across components and products/systems
• Consolidated EBITDA margin of 20+% as the incubated verticals progress from
investment phase to production mode and the international operations turnaround after a
challenging period
• Consolidated ROCE improvement by 500 bps from FY 2022 levels of 20% driven by a
combination of operational improvement & ramp-up of activities across all business
verticals
Further, as the new verticals gain traction and become profitable and relevant in their
respective ecosystem, we expect the capex intensity to subside and the return ratios to
improve. A stronger foothold in less cyclical sectors and diversification across the
customer segments of B2B, B2G and B2C will further translate into stable and predictable
revenue generation. We also believe our strategy of creating own intellectual property as
technology platforms will truly differentiate us.
Final Thoughts
As we get going on achieving our business and strategic goals for the coming year and
work on the glide path for Vision 2030, our focus would be on delivering G(Growth)
D(Diversification) Growth driven by Diversification with Profitability.
I thank all the stakeholders for their trust in us every time we transform.
While we are confident of achieving results as always, we will not be complacent.
Having set our targets for an ambitious and bigger transformation, we will revisit them in
FY 2026 to determine the progress and take corrective steps it required. The journey will
be anything but smooth and many challenges will come in the newer frontiers. We believe
that we are on much stronger and stable footing.
Going forward, I seek the continued support of all stakeholders to make Bharat Forge a
company that is completely different from what it is today and create value for all.
Warm regards,
B N Kalyani
Chairman and Managing Director
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Bharat Forge Ltd
Company History
Bharat Forge Ltd (BFL), the Pune based Indian multinational, is a global provider of high performance, innovative, safety & critical components and solutions to various industrial sectors including Automotive, Railways, Power, Defence, Construction & Mining, Aerospace, Marine and Oil & Gas. The company is a part of Kalyani Group. The Company is engaged in the manufacturing and selling of forged and machined components including aluminium castings for the auto and industrial sectors. It operate manufacturing facilities at Mundhwa, Baramati, Chakan, Satara and Nellore locations.
Bharat Forge Ltd was incorporated in the year 1961. In the year 1996, the company commenced commercial production. In the year 1995, the company commenced exports to erstwhile USSR by winning a large contract for under carriage components. In the year 1990, they made investment in state-of-art forging technology. Also, they commissioned 16000 MT press line. In the year 1991, the company commenced supply of engine & chassis components to Japan, USA and UK.
In the year 2001, the company commissioned their second 16000 MT press line. Also, they acquired the order book of Dand Kirkstall. In the year 2002, they made investment of $ 80 million in Research & Development, Testing & Validation and state-of-the-art Heavy Duty Truck Crankshaft Machining facilities. In November 21, 2003, the company acquired Carl Dan Peddinghus GmbH & Co. KG (CDP) of Germany and with this acquisition, the company emerged as world's second largest forging company. Also, they acquired Imatra Kilsta AB, Sweden & Scottish Stampings, Scotland.
In the year 2005, the company signed a joint venture contract with FAW Corporation for their forging business. In September 21, 2005, the company through their wholly owned subsidiary, Bharat Forge Beteiligungs GmbH, Germany, acquired Imatra Kilsta AB, Sweden along with its wholly owned subsidiary, Scottish Stampings Ltd, Scotland (together called Imatra Forging Group), which are now renamed as Bharat Forge Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Ltd, respectively. Also, they acquired Federal Forge now known as Bharat Forge America Inc., which provided the company with a manufacturing presence in USA, one of their largest markets.
In the year 2006, the company made investment of $ 100 million to set-up dedicated state-of-the-art forging & machining facilities for non-auto components. In the year 2008, they signed an MoU with NTPC. In August 2008, they commissioned India's Largest Commercial Open Forging Press. Also, the company in association with Alstom formed a joint venture in Indian to manufacture state-of-the-art super critical power plant equipment. In March 2009, the company started operations in the new state-of-the-art 80 Mtr-T counterblow hammer in Baramati for production of heavy forgings for large diesel engines and aerospace applications as well as Machining line for heavy duty.
During the year 2009-10, the company incorporated a joint venture (JV) company, BF-NTPC Energy Systems Ltd (BFNESL), with a 51% equity interest held by the company and balance held by NTPC Limited for the manufacture of critical items of Balance of Plants and other equipment for which India still remains dependent on imports. Also, the company set up two joint venture companies in partnership with ALSTOM Power Holdings S.A. for manufacturing sub-critical and supercritical thermal power plant equipment. The two JV companies named ALSTOM Bharat Forge Power Ltd and Kalyani ALSTOM Power Ltd will manufacture turbine and generators for power plants in the 300- 800 MW range and auxiliaries like heat exchangers, condensers and deaeraters, respectively.
During the year, the company entered into Preliminary Joint Venture and Shareholders' Agreement with AREVA NP, France, to create a manufacturing facility for heavy forgings and castings for the power sector particularly Nuclear Power segment and other heavy industries in India. In January 2010, the first phase of the capacity creation plan for the non-auto components business was completed with the commissioning of the ring rolling facility at Baramati. Also, they established Kalyani Centre for Technology & Innovation.
During the year 2010-11, the company commissioned new vertical heat treatment facility for manufacture of Turbine and Generator Rotors alongwith thermo stability test facility. Also, Ring Rolling Mill in BARAMATI became fully operational and became a supplier of critical rings for different customers specially for Gear Box manufacturers. Also, they company made an additional investment of Rs 150 crore in expanding machining line further for crankshaft machining in Baramati.
In 2012, the companie's power equipment joint-venture with Alstom bags Rs. 1,570 crore order from NTPC Ltd.
In 2013, NTPC orders three supercritical turbine islands from Alstom-Bharat. Bharat Forge, Alstom Power JV bags Rs 2,251 cr order from NTPC.
In 2014, there was a amalgamation of Joint Venture Companies -'Safran and Bharat Forge to form partnership to address opportunities in Indian civil and military aerospace'. The Kalyani Group Sign a Strategic Partnership for the Air Defence of India
In 2015, High Tech Rail Component Manufacturing Facility at Bharat Forge Centre for Advanced Manufacturing, Baramati was inaugurated. Also during the year, production began at Alstom-Bharat Forge's new turbine and generator manufacturing facility in India. The company awarded Recognition Prize - Energy Efficiency Award 2015. Also during the year, the company announced the acquisition of Oil & Gas Machining Company, Mecanique Generale Langroise (MGL) in France. During the year, Bharat Forge formalized a significant supply agreement for long term co-operation with Rolls-Royce. On 17 February 2016, Boeing and Bharat Forge (BFL) announced the first shipment of titanium flap-track forgings made by the Indian supplier for Boeing's Next-Generation 737. Bharat Forge will also supply forgings for the 737 MAX, scheduled to enter into service in 2017. The companies continue to address opportunities to expand BFL work in support of Boeing and its supply chain partners around the world. BFL also intends to expand its capabilities to offer higher value machining and manufacture of assemblies.
On 29 March 2016, Bharat Forge announced that the company has teamed up with US based AM General LLC to bid for India's Light Specialist Vehicle (LSV) program using AM General's battle-tested HMMWV as the LSV's base platform - with final build and production to take place in India. The teaming between the two companies will lead to providing cost effective and best-in-class mobility solutions for Indian Armed Forces.
On 26 April 2016, Bharat Forge announced that Boeing has awarded a contract to the company for titanium forgings for the Boeing 777X. The titanium forgings will be developed and manufactured by Bharat Forge using a closed die forging process.
On 7 June 2016, Bharat Forge announced that its joint venture with GE viz. Alstom Bharat Forge Power Private Ltd. (ABFPPL) has won a contract worth $219 million approximately from NTPC. ABFPPL will supply two units of 800 MW ultra-supercritical Steam Turbine Generator Islands, on EPC basis, along with related civil work for the Telangana Super Thermal Power Project Phase-1.
On 8 November 2016, Bharat Forge announced that its Board of Directors has approved divestment of its 49% stake in the power equipment JV with Alstom, Alstom Bharat Forge Power Private Limited (ABFPL) for US$ 35 million. The JV incorporated in Delhi with its manufacturing facility at Sanand was formed in 2009 to address opportunities arising from the expansion in the Indian power sector.
On 18 November 2016, the Finance & Risk Management Committee constituted by the Board of Directors of Bharat Forge Limited (BFL) approved the proposed acquisition of 100% shareholding of Walker Forge Tennessee LLC (WFT) through the company's US subsidiary, Bharat Forge America. WFT is a leading supplier of complex, steel and high-alloy steel, engine & chassis components to a diverse group of customers across Automotive & Industrial sectors. The transaction value is US$ 14 million which will be funded through internal accruals & debt. This proposed acquisition is focused on establishing BFL's manufacturing footprint in North America and on increasing BFL's product offering into the Passenger Car and Commercial Vehicle segments as well into industrial sectors such as Construction & Mining and allied industries. This will also enable BFL to expand its presence in North America.
Kalyani Rafael Advanced Systems (KRAS), a Joint Venture between Kalyani Strategic Systems Ltd., a subsidiary of Bharat Forge, and Rafael Advanced Defense Systems Ltd. of Israel, inaugurated their state-of-the-art facility at Hyderabad on 3 August 2017. KRAS would be India's first private sector advanced defence sub-systems manufacturing entity. Spread across an area of 24,000 sq.ft., the facility will enable production of high-end technology systems for Indian Armed Forces. It will be engaged in development of a wide range of advanced capabilities like Command Control and Guidance, Electro-Optics, Remote Weapon Systems, Precision Guided Munitions and System Engineering for System Integration. The facility will also target to export products to other countries.
The Board of Directors of Bharat Forge (BFL) at its meeting held on 10 August 2017 approved acquisition of the entire remaining 40% stake in its subsidiary company - Analogic Controls India Limited (ACIL). Upon acquisition, ACIL will become a wholly owned subsidiary of the company. ACIL is engaged in the design and development of reliable onboard/ground systems, safety arming mechanism, launcher relay unit, reliable electronic systems and sub-systems for mission critical applications. ACIL offers products and services for mission technologies of national importance in Defence, Aerospace, Communications and Industrial Electronics. ACIL clocked turnover of Rs 7.34 crore in FY 2016-17. BFL, the erstwhile promoters of ACIL and ACIL had entered into a Share Subscription Agreement and Shareholders' Agreements on 23 April 2013 and 18 June 2013 respectively, for acquiring 60% stake in ACIL by BFL.
The Board of Bharat Forge at its meeting held on 10 August 2017 also recommended issue of bonus shares to the holders of equity shares of the company in the ratio of 1:1. Further On October 3, 2017, the Company had issued bonus shares, in the proportion of 1:1 i.e. 1 (one) bonus equity share of Rs 2/- each for every 1 (one) fully paid-up equity share. Accordingly the Company has allotted 232,794,316 Equity shares of Rs 2/- each fully paid-up, to the shareholders of the Company.
On 10 August 2017, Bharat Forge announced that it has secured its maiden order from the Ministry of Defence to supply 1,050 Dual Technology Detection Equipment. The order worth Rs 201.60 crore, will be manufactured in India and is to be concluded within two years.
On 17 January 2018, Bharat Forge announced that it has opened a Research & Development facility in UK, in MIRA Technology Park, the UK's leading automotive technology park and Enterprise Zone, where it will be developing components & sub-systems focused on Electric Vehicles. This facility will complement the capabilities & knowledge established over the past 2 years in Kalyani Centre for Technology & Innovation (KCTI) & Kalyani Centre for Manufacturing Innovation (KCMI) in Pune focused on delivering solutions for Electric Vehicles. On 8 February 2018, Bharat Forge announced strategic investment of upto Rs 30 crore for eventual stake of 45% in an EV startup, Tork Motorcycles. Bharat Forge is making a strategic investment in Tork Motorcycles as a part of its overall E-Mobility powertrain development. Tork's strength lies in its in-house team that has designed, developed and built the complete electric motorcycle. Their knowledge in the overall EV powertrain development will help Bharat Forge gain access to technologies in personal E-mobility space. Accordingly, the Company has acquired first tranche of 30.37%. TORK Motors is an electric drive train company mainly focused on electrical two wheeler and/or premium electric motor cycle.
During the FY2018,the Company has purchased remaining 40% shares of Analogic Control India Limited (ACIL), from its erstwhile promoters. With this acquisition, ACIL became a WhollyOwned Subsidiary of the Company.
Further, during the year the Company has completed the sale of remaining balance equity of 26% in the power equipment Joint Venture, Alstom Bharat Forge Power Private Limited (ABFPPL). With this divestment, the Company has completed its total divestment in ABFPPL.
During the year 2017-18,the Company also incorporated a wholly owned subsidiary in Israel viz. Indigeneous IL Limited with an objective of exploring targets in technology, space and also explore tie-ups with universities/tehnology institutions in further upgrading research and development initiatives in various new technologies.
As on 31 March 2018,the company had 20 subsidiaries and one associate company under its roof.
During the FY2019, the company has generated strong cash flows of Rs 1,225 Million despite committing a Capex of Rs 8,500 Million during the year.
In FY'19, the Company installed the first CLWT machine, a 4200 T die-casting machine which is the biggest in India and the 5th largest in
the world. Besides this, it acquired customers even before completing the plant construction of the CLWT plant.
During the FY2020,the Company promoted and incorporated a wholly-owned subsidiary company in the name of Kalyani Centre for Precision Technology Limited (KCPTL), to carry out manufacturing activities of auto parts.
As on March 31, 2020, the Company has 25 subsidiaries (including step down subsidiaries) and 4 Associate Companies.
Capex incurred in the year 2019-20 amounting to Rs 5,164 Million towards forging and machining capacity in Maharashtra.
In FY'20, the Company executed the commissioning of CLWT plant. It started localizing electric powertrain for intermediate and Light Commercial Vehicle (ILCV) and 9M Bus segment in India.
On July 10, 2020 Bharat Forge Hong Kong (BFHK) Limited, a step down subsidiary of the Group was deregistered and dissolved. The closure of BFHK did not have any material impact on the operations/results of the Group.
On March 16, 2021, the Company invested Rs 0.01 million to acquire 100% stake ln equity of Kalyani Powertrain Private Limited to undertake various initiative for e-mobility business.
On May 06, 2021, the Company invested Rs 0.10 million to acquire 100% stake in equity of BF Industrial Solutions Private Limited (formerly known as Nouveau Power & Infrastructure Private limited) as a special purpose vehicle (SPV) for implementation of approved resolution plan of National Company Law Tribunal (the NCLT) for acquisition of Sanghvi Forging & Engineering limited, Baroda in terms of Insolvency and Bankruptcy code, 2016.
During FY'21, the Company received prestigious order from a major global OEM for forging and pre-machined components. It completed trials for three - Kalyani M4 vehicle, Kalyani Maverick and Mine Protected Vehicle (MPV). Further trials for JV Protective Carbine (JVPC) and FSAPDS were also completed. It was awarded a contract to supply the Kalyani M4 vehicle.
In FY 2022, the Company's subsidiary, Kalyani Powertrain Limited (KPTL) received maiden order for supply of products such as High Voltage High Power DC-DC Convertors, Motor Controllers for 2W applications from an Indian OEM. Its subsidiary company, Tork Motors launched its flagship product line of Electric Motorbike, KRATOS and KRATOS-R which received 2000 orders for these bikes .
In FY'22, the Company in collaboration with NASA JPL developed ventilators (FDA approved for emergency use authorization), in and around Pune, which was in great demand during the pandemic. It acquired erstwhile Sanghvi Forging & Engineering Limited (SFEL) for Rs. 900 million. It completed the capex and commercial production at its aluminum forging facility in North Carolina, US. With this, the Company now has two operational aluminum forgings plants; one in the US and the other in Germany. Its Advanced Towed Artillery Gun System (ATAGS), designed by DRDO, has completed its fifth and final firing trials. Apart from this, the Company signed the SPA to acquire Coimbatore-based JS Auto Cast Foundry India. It bagged new business worth Rs. 10,000 Million in FY 2022, bulk of order wins coming from PV & Industrial sectors.
In FY'22, the Company productionalized and shipped the Kalyani M4 armored vehicle to Indian Army for UN Peacekeeping mission. Its KM4 armored vehicles became the only one in category to complete desert trials at Rann of Kutch. During the year 2022, it diversified into new areas of Command, Control, Communications, Computers (C4) Intelligence, Surveillance and Reconnaissance (C4ISR) by participating and winning the iDex challenge through subsidiaries and partners. It made strategic investments in Tevva Motors Limited, UK, Tork Motors Pvt Ltd, India and established global 50:50 JV, REFU Drive GmbH with Prettl Group, Germany.
During the year 2022-23, the Company subscribed to 26% of paid-up share capital of Avaada MHVidarbha Private Limited on April 19, 2022 and Avaada became an associate of the Company. Kalyani Powertrain Limited (KPL), a WOS of the Company incorporated a WOS in the name, of 'Electroforge Limited' on July 25, 2022 and accordingly, Electroforge Limited was made a step-down subsidiary of the Company.
During 2022-23, the Company acquired Coimbatore-based casting and machining company, JS Autocast Foundry India Private Limited (JSA) effective on July 01, 2022. It commenced commercial production at t its aluminum forging facility in North Carolina, US. The Company through BF Infrastructure Limited (BFIL), its WOS got into a Share Purchase Agreement in Feb' 23 with PNC Infratech Limited and Ferrovia Transrail Solutions Private Limited for purchase of 51% shareholding in Ferrovia. The BFIL's shareholding in Ferrovia increased from 49% to 100%, which resulted Ferrovia becoming a WOS of BFIL and a step-down subsidiary of the Company. The Company transferred its stake held in its WOS, Analogic Controls India Limited (ACIL) and its associate Aeron Systems Private Limited to its WOS, Kalyani Strategic Systems Limited (KSSL), and consequently, ACIL became a WOS of KSSL and a step-down subsidiary of the Company. To further consolidate the defence business, with effect from March 10, 2023, ACIL has merged into KSSL.
Bharat Forge Ltd
Directors Reports
Bharat Forge Ltd
Company Background
| Incorporation Year | 1961 |
| Registered Office | Mundhwa,Pune Cantonment
Pune,Maharashtra-411036 |
| Telephone | 91-020-6704 2777/2476,Managing Director |
| Fax | 91-020-2682 2163 |
B N KalyaniB N Kalyani| Company Secretary | Tejaswini Chaudhari |
| Auditor | B S R & Co LLP |
| Face Value | 2 |
| Market Lot | 1 |
| Listing | BSE,Luxembourg,MSEI ,NSE,Singapore, |
| Registrar | Bharat Forge Ltd
Mundhwa,Pune Cantonment Area, ,Pune - 411 036 |
Bharat Forge Ltd
Company Management
| Director Name | Director Designation | Year |
|---|
| B N Kalyani | Chairman & Managing Director | 2023 |
| G K Agarwal | Deputy Managing Director | 2023 |
| Amit B Kalyani | Deputy Managing Director | 2023 |
| P G Pawar | Independent Director | 2023 |
| B P Kalyani | Executive Director | 2023 |
| S E Tandale | Executive Director | 2023 |
| Lalita D Gupte | Independent Director | 2023 |
| P H Ravikumar | Independent Director | 2023 |
| Vimal Bhandari | Independent Director | 2023 |
| Kishore Saletore | Executive Director & CFO | 2023 |
| Tejaswini Chaudhari | Company Sec. & Compli. Officer | 2023 |
| Dipak Mane | Independent Director | 2023 |
| Murali Sivaraman | Independent Director | 2023 |
Bharat Forge Ltd
Listing Information
| Listing Information |
|---|
| BSE_500 |
| BSE_CG |
| BSE_100 |
| BSE_200 |
| BSEDOLLEX |
| CNX500 |
| BSEMID |
| CNXMIDCAP |
| CNXINFRAST |
| CNXMID50 |
| CNXAUTO |
| CNX200 |
| BSECARBONE |
| BSEALLCAP |
| INDUSTRIAL |
| BSEMIDSELE |
| SENSNEXT50 |
| MID150 |
| LMI250 |
| MSL400 |
| NFTYLM250 |
| NFTYMC150 |
| NFTYMSC400 |
| NFTY200M30 |
| NF500M5025 |
| NFTYINDMFG |
| NFTYMIDCPS |
| NFTYTOTMKT |
| NFMC150M50 |
| NMIM503020 |
Bharat Forge Ltd
Finished Product
| Product Name | Unit | Installed
Capacity | Production
Quantity | Sales
Quantity | Sales
Value |
|---|
| Sale of Products | NA | 0 | 0 | 0 | 7116.705 |
| Scrap-Manufacturing | MT | 0 | 0 | 0 | 315.922 |
| Export Incentive | NA | 0 | 0 | 0 | 103.9 |
| Sale of Services | NA | 0 | 0 | 0 | 31.672 |
| Other Operating Revenue | NA | 0 | 0 | 0 | 4.513 |
| Others | NA | 0 | 0 | 0 | 0 |
| Sale of Electricity / Windmill | NA | 0 | 0 | 0 | 0 |
| Unspecified | NA | 0 | 0 | 0 | 0 |
| Die Design & Preparation Charg | NA | 0 | 0 | 0 | 0 |
| Excise Duty | NA | 0 | 0 | 0 | 0 |
| Job work | NA | 0 | 0 | 0 | 0 |
| Other Financial Income | Rs. | 0 | 0 | 0 | 0 |
| Steel Coils-Traded | MT | 0 | 0 | 0 | 0 |
| Bonnets & key shaft | No | 0 | 0 | 0 | 0 |
| Rocker Arm Assembly | No | 0 | 0 | 0 | 0 |
| Tubes-Seamless-Traded | Mtr | 0 | 0 | 0 | 0 |
| Steel Forgings | MT | 0 | 0 | 0 | 0 |
| Steel Forgings at Baramati | MT | 0 | 0 | 0 | 0 |
| Clamps | No | 0 | 0 | 0 | 0 |
| Engineering Equipment-General | No | 0 | 0 | 0 | 0 |
| Material Handling Equipments | MT | 0 | 0 | 0 | 0 |
| Material Handling Equipments | No | 0 | 0 | 0 | 0 |
| Mechined Components | No | 0 | 0 | 0 | 0 |
| Ring Rolling | MT | 0 | 0 | 0 | 0 |
| Well Head Assembly & Parts | No | 0 | 0 | 0 | 0 |
| Bar Cutting Bandsaw | No | 0 | 0 | 0 | 0 |
| Hydraulic/Mechanical Presses | No | 0 | 0 | 0 | 0 |
| Transmissions & Allied Access. | No | 0 | 0 | 0 | 0 |
| Crank Shafts (Chakan)-Fin.M/c | No | 0 | 0 | 0 | 0 |
| Crank Shafts-Finished Machine | No | 0 | 0 | 0 | 0 |
| Couplings | MT | 0 | 0 | 0 | 0 |
| Front Axle Assembly | No | 0 | 0 | 0 | 0 |
| Front Axle Assembly & Comp. | No | 0 | 0 | 0 | 0 |
| Front Axle Assembly(Chakan) | No | 0 | 0 | 0 | 0 |
| Al.Road Wheel | No | 0 | 0 | 0 | 0 |