Bharat Forge to invest Rs 1900 crore in NTPC JV

World’s largest forgings company Bharat Forge is making big plans for its power equipment business. The company is going to invest Rs 1900 crore in its joint venture with India’s largest power company NTPC. And its joint with French energy giant Areva will also begin construction for nuclear forgings plant this month, say company sources. When contacted Bharat Forge Chief Operating Officer Sunil Chaturvedi said, “The Bharat Forge NTPC JV is currently looking for technology partners for manufacturing high pressure pipes, pumps and valves, which are used in thermal power plants.” The plans are expected to be finalised by March-April. The company has already secured 100 acres of land in Sholapur to set up a plant with a capacity of 60,000 to 70,000 tonnes per annum. Under the NTPC joint venture the company may have three to four more joint ventures with those technology partners. 

Bharat Forge is also fast-tracking its plans with Areva. The framework for its nuclear power plant forgings facility is expected to be discussed during the ongoing visit of French President Nicholas Sarkozy and his delegation in India. The company will then begin construction of the facility by end of this month. 

Angel Broking research analyst Vaishali Jajoo says, “As per the indications given by Bharat Forge management, its margins are expected to improve in the coming few years with the share of non-auto business like power going up in the overall revenues.” 

In the second quarter of this financial year, the company registered an operating margin of 17.5 per cent. Its non-auto business contributed about 38 per cent of the company’s revenues in the second quarter. The share of revenues from non-auto is expected to go over 40 per cent by next financial year, says the company. 

In fact, Bharat Forge chairman Baba Kalyani has also told shareholders in the last annual general meeting that “There is no doubt that India will continue investing heavily in physical infrastructure over the next two decades. It will be primarily in power, transportation and construction & mining. All these sectors require specialised forgings and your company is focusing to be a key player in these areas.”