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Bharat Forge hunts for acquisitions as plants run at full capacity

Auto News - Published on Wed, 03 Jan 2018

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BloombergQuint reported that Forge Ltd. will look at acquisitions, including distressed assets, to meet rising demand in the US and India as the nation’s largest forging and auto parts maker is running its plants at full capacity. The company, which gets about two-thirds of its revenue from overseas, expects a strong pick-up in demand for trucks in North America, Mr Baba Kalyani, chairman of Bharat Forge, told BloombergQuint in an interview. “It’s a big opportunity for us to increase market share in the US The domestic demand is also strong.”

Mr Kalyani said that changes in the logistics industry driven by the Goods and Services Tax will push demand for large (over 25 tonnes) heavy commercial vehicles, CRISIL said in December report. That’s because as logistics hubs or regional warehouses get larger, average payloads will increase. And it’s expected to fuel demand for auto parts. Opportunity in the US stems from changes in automobile transmissions.

Mr Kalyani said the company is almost running out of capacity. “We are building a plant in Andhra Pradesh, expanding capacity in Baramati, Maharashtra and will do a fair amount of capex in 2018-19. Bharat Forge is looking at distressed assets and is closely following the NCLT process.”

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Posted By : Rabi Wangkhem on Wed, 03 Jan 2018
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