Bharat Forge to up capital goods play

Bharat Forge, the auto components major, is planning to reduce its reliance on auto component business by focusing more on its capital goods foray.

From the current 17%, the company is targeting raising its revenue contribution from non-auto business to 40% by 2013.

“We want to de-risk our business by diversifying our portfolio. Our foray into new non-automotive sectors such as rail, marine, oil & gas, energy and aerospace is driven by our metallurgical expertise and basic skill sets with new product design,” Amit Kalyani, executive director, said on the sidelines of at the CII Innovation Summit.

The company is betting on the capital goods space on account of the government emphasis on infrastructure spend.

According to the Planning Commission, investments in infrastructure will need to increase from 4.6% of GDP to between 7% and 8% in the 11th Plan period, Kalyani said.

The slump in the global auto market saw the company deliver poor performance during the fiscal 2008-09.

Last fiscal, the company’s revenues decreased from Rs 2,197 crore to Rs 2,058 crore mainly due to the global slowdown.

Around 65% of the company’s revenues come from the European and the North American markets.

“We will increase our focus in the domestic markets which are growing faster than most other economies. Currently, India contributes around a quarter of our revenues which we see going up in future,” Kalyani said.

The company also plans to reduce its exposure to the commercial vehicle segment which currently contributes around 40% of its income.