Bharat Forge: Minimising risk through diversification

Over the last two decades Bharat Forge, the flagship company of India-based Kalyani Group, has evolved from just a small domestic player to one of the global leaders in the automotive forging industry. While the company's growth in India has been primarily organic in nature, it has expanded its international presence mainly through acquisitions and joint-ventures

Dual-shore manufacturingThe company has recently decided to expand its presence in the non-automotive areas with an aim of generating 40% of FY2012 sales from these areas, compared with 18% in FY2008. Part of the reason behind this paradigm shift is Bharat Forge's plan to de-risk its business from excessive dependence on the volatile automotive industry. The company foresees tremendous growth potential in the non-automotive sectors such as aerospace, railways & marine, energy, oil & gas and capital goods. However, auto component business will continue to remain the flagship business of the company.  Bharat Forge is a global company generating about three-quarters of FY2008 sales outside India. Initially, the company served the international markets primarily through exports. Although exports are a still major source of revenue, accounting for 40% of FY2008 sales, the company has increased its global presence in the last eight years through acquisitions.