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Informist, Thursday, May 8, 2025

By Gopika Balasubramanium

MUMBAI – Bharat Forge Ltd.'s net profit and revenue for the March quarter contracted more sharply than expected by analysts. The company's net profit for the quarter fell over 11% on year to INR 3.46 billion, significantly lower than the INR 3.73 million expected by analysts. Sequentially, the net profit was down only marginally. The revenue from operations fell a little over 7% on year to INR 21.63 billion and missed the consensus estimate of INR 22.31 billion. Sequentially the revenue rose over 3%.

The company's net profit contracted on year for the second consecutive quarter and its revenue contracted on year for the third straight quarter.

For the financial year 2024-25 (Apr-Mar), Bharat Forge's net profit fell more than 7% to INR 13.22 billion and its revenue fell over 1% to INR 88.44 billion. The company's net profit margin contracted to 15.98% in the March quarter from 16.73% on year. On the other hand, its operating margin improved to 28.51% from 28.31% in the year ago period.

Bharat Forge's consolidated earnings before interest, taxes, depreciation, and amortisation for FY25 was INR 27.58 billion, up nearly 8% from FY24. Its standalone EBITDA for the March quarter was INR 6.29 billion, down nearly 4% on year. Its standalone EBITDA margin was 29.1%, up 100 basis points from the year-ago quarter.

Consolidated revenue from the company's forging segment declined marginally on year to INR 34.36 billion, but grew 12% sequentially. The company earned revenues of INR 2.84 billion from its defence business for the March quarter, down 50% on year and 16% on quarter.

"For FY26, as of now, we are refraining from providing any outlook for the export business (which accounts for 30% of consolidated revenues) due to volatility & lack of visibility caused by the tariff situation," B.N. Kalyani, chairman and managing director, Bharat Forge, said in an investor presentation.

The company will focus on improving the consolidated profitability through internal actions, he said. This will be carried out by reducing losses in the electric mobility vertical, evaluating options for the steel business in Europe, improving operational performance in the aluminium business, and leveraging the manufacturing footprint in the US to garner new business, he said.

The company will also focus on new business wins in traditional forgings, defence, aerospace and castings business to ensure continuation of momentum, he said. "The integration of AAM India business will occur in FY26 and we will leverage that platform to further our product portfolio and presence in India," he said.

Bharat Forge's domestic revenue for the quarter fell nearly 14% on year and 1.5% sequentially to INR 9.31 billion. For FY25, revenue from domestic business rose a mere 2% to INR 41.16 billion. Net sales from the company's commercial vehicles business in India rose nearly 10% on year and nearly 17% sequentially to INR 2.66 billion. Growth in company's commercial vehicle business is due to market buoyancy seen during the March quarter, the company said in its investor presentation.

Revenues from the company's industrial business in India fell sharply to INR 4.48 billion, down nearly 30% on year and down 13% sequentially. This was largely due to the conclusion of some export orders at Kalyani Strategic Systems Ltd., its wholly-owned subsidiary, the company said.

Revenues from its domestic passenger vehicle business rose 15% on year to INR 901 million in the latest quarter. However, the revenue was down 8.5% sequentially. Passenger car business saw a stable sequential performance in the March quarter and Bharat Forge expects this to continue as vehicle demand is likely to be flat to moderately positive in the coming year.

Bharat Forge's export revenue in the quarter ended March declined over 1% on year to INR 12.32 billion but it was up 7% sequentially. Overseas revenue in FY25 fell 4% on year to INR 47.28 billion. Revenue from overseas commercial vehicle sales declined nearly 13% on year and 9% sequentially to INR 4.46 million. Exports of commercial vehicles to Europe saw some revival after the poor sales in the December quarter, the company said. Commercial vehicle sales in the US declined in line with the weakness in the "class 8 markets" in the US, Bharat Forge said.

Overseas sales from the company's passenger vehicle segment declined 1.5% on year to INR 3.22 billion, but jumped up over 32% sequentially. Passenger car exports picked up sequentially as demand in Europe and Latin America improved slightly, the company said. Net sales from the company's overseas industrial business increased 12% on year and over 7% on quarter to INR 4.64 billion in the March quarter.

In the March quarter, the company's revenue from exports to US grew 3.5% on year to INR 8.16 billion. Sales in Europe fell over 14% on year to INR 3.20 billion. The company's revenues from exports to Asia-Pacific markets in the reporting quarter rose nearly 10% on year to INR 956 million.

Bharat Forge's total expenses for the reporting quarter were INR 17.17 billion, down nearly 7% on year but up nearly 4% sequentially. The reduction was largely driven by a contraction in its finance costs and raw material costs. The cost of materials consumed by Bharat Forge fell nearly 4% on year to INR 9.02 billion. Employee costs increased 2% on year to INR 1.54 billion, while depreciation and amortisation costs rose 4% on year to INR 1.22 billion. Its other expenses fell over 3% on year to INR 5.35 billion. The company will pay a final dividend of INR 6 per share for FY25. Shares of the company closed at INR 1,113.40 on the National Stock Exchange, down 2.4%.  End

Edited by Ashish Shirke

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