Management commentary, usually measured and aimed at boosting confidence among investors is changing amid the severe slowdown in the country. More than Bharat Forges' quarterly numbers, investors and brokerage were surprised at its sharp commentary on the business environment in the country, after the company said the business environment in the past quarter had been the "toughest period witnessed by the company in the decade".

"The surprise to investors came in the form of management commentary which effectively poured cold water on hopes of an early cycle recovery," said ICICI Securities.

"On a longer-term basis, we like BHFC's strategy of revenue diversification; however, the weak CV segment outlook coupled with low visibility on recovery in oil & gas segment makes us cautious," it added.

The brokerage downgraded the stock to ADD from BUY.

The company, which produces a range of components for the automotive and non-automotive sector, said that sluggish macro-economic environment, weak demand across sectors and introduction of BS VI emission standards led to the decline in demand.

Bharat Forge scrips on Friday reported a profit before tax (PBT) decline of 27 per cent year-on-year (YoY) to Rs 251 crore for the quarter ended September.

In its forward looking statement, the company said: "Given the prevailing environment in India and the slowdown in North America and Europe, we expect H2 FY20 to be lower than H1 FY20."

Without mincing words, B.N. Kalyani, Chairman and Managing Director said: "The quarter gone by has been the toughest period witnessed by the company in this decade. The sluggish macroeconomic environment in India resulting in weak demand across sectors coupled with automotive OEM's need to destock ahead of introduction of BS VI emission standards led to demand declining continuously through the quarter."

Kalyani said weakness in the economy resulted in 35.6 per cent de-growth in domestic revenues and a decline of 18.1 per cent in the export revenues, "chiefly on account of decline in O&G revenues".

However, the company also said that amid this weak environment, the passenger vehicle business stands out across both domestic and export markets with strong out performance against underlying demand.

"The PV business has grown by 25 per cent on sequential basis and 20.9 per cent compared to the same quarter last year," the company added.