The company feels that the situation in India improved significantly and showed improvements in Q1 F10 and these have been sustained in Q2 F10. Passenger cars and light commercial vehicles are showing an upturn while heavy commercial vehicles continue to remain depressed in India. This upturn is expected to sustain in the next quarter.

Mahindra forgings Limited had initiated several initiatives for cost reduction and cash conservation in the second half of the last year including : Improvement in Raw Material yield ratio; Reduction of rejections; Productivity improvements and tooling cost; Reduction in working capital levels.

Mahindra Forgings has readjusted its strategy to face the new reality and this financial year, the company will focus on cash conservation through inventory & capex control and cost reduction through operational improvements (yield improvement, rejections etc.) in India and rightsizing of manpower and operations in Europe. It will also try to establish greater co-operation and effective utilization of synergies between the Indian and European operations.

The company's European business has been significantly affected by the economic downturn in Europe and several restructuring initiatives including right-sizing of manpower and operations have been undertaken. The team in Europe is focused on restructuring fixed costs and has reduced its personnel and fixed costs  by nearly 40%. Inventories have been reduced by 40% over last 12 months and Capital Expenditure has been curbed as part of a structured program to conserve cash in the eventuality that the recovery takes longer than expected.

The situation in Europe seems to have stabilized at the end of H1 F10. The forecasts especially in the commercial vehicle segment suggest that the bottom may have been reached.

The total standalone operating income for the quarter ended 30th September 2009 is Rs 74.23 crores as against Rs 76.75 crores during the corresponding period last year. Profit before depreciation, interest, exceptional items and tax is Rs 12.78 crores as against Rs 6.83 crores in Q2 last year - a growth of 87.1%.

For the consolidated Mahindra Forgings Group, the total income for the second quarter ended 30th September 2009 is Rs 316 crores as against Rs 718 crores for Q2 last year. Profit before depreciation, interest, exceptional items and taxation (EBITDA) for the current quarter is Rs 28 crores as compared to Rs 64 crores in Q2 last year. The consolidated group loss for the current quarter after considering exceptional items and taxation is Rs 27 crores as against loss of Rs 4 lacs in Q2 last year.

The total standalone operating income for the half year ended 30th September 2009 is Rs 143.82 crores as against Rs 138.47 crores during the corresponding period last year - a growth of 3.9%. Profit before depreciation, interest, exceptional items and tax is Rs 22.12 crores as against Rs 10.711 crores in H1 last year - a growth of 106.5%. The loss after tax for the quarter is Rs 3.15 crores as against 17.14 crores in H1 last year.

For the consolidated Mahindra Forgings Group, the total operating income for the half year ended 30th September 2009 is Rs 618 crores as against Rs 1429 crores in H1 last year. Loss before depreciation, interest, exceptional items and taxation (EBITDA) for the current half-year is Rs 1 crores as compared to profit of Rs 153 crores in the same period last year. The consolidated group loss for the current half-year after exceptional items, taxation and after deduction minority interests is Rs 105 crores as against profit of Rs 30 crores in the same period last year.