Informist, Thursday, Nov. 14, 2024

By Akshay V. Johnson

MUMBAI – Bharat Forge Ltd. posted lower than expected earnings for the September quarter due to a weak European automotive market and sluggish demand in the domestic commercial vehicles business. The company's revenue and total expenses registered a year-on-year decline for the quarter, while the net profit showed some improvement on the back of a better operational performance.

The company reported a net profit of INR 3.61 billion for Jul-Sept, up 4.4% on year. Analysts had estimated the company's net profit at INR 3.91 billion.

The company reported revenue of INR 22.47 billion for Jul-Sept, marginally lower than INR 22.49 billion a year ago. Analysts had expected the company to report revenue of INR 23.48 billion. The fall in revenue is the first after 14 consecutive quarters of growth. Sequentially, the company's net profit rose 34% and revenue was down 4%. Other income for the September quarter was INR 348.03 million, down 18% on year.

For Jul-Sept, the company reported total expenses of INR 17.93 billion, down 1.9% on year. Bharat Forge's raw material cost was INR 9.32 billion in Jul-Sept, down 11%. Other expenses were at INR 5.43 billion, up 5%. The company's employee benefit expense was up 7.4% at INR 1.61 billion and its depreciation and amortisation expenses fell 4% to INR 1.1 billion.

For Apr-Sept, the company reported a net profit of INR 6.31 billion, up 4.1%. Its revenue for the period was INR 45.85 billion, up 4.8%.

Bharat Forge posted earnings before interest, tax, depreciation, and amortisation of INR 6.48 billion, up 5.1% on year. Analysts had estimated the EBITDA for the quarter at INR 6.58 billion. The company's EBITDA margin was 28.8% for the September quarter, up 140 basis points on year. For Apr-Sept, the company's EBITDA was INR 13.05 billion, up 11.6% on year. The EBITDA margin for the half year was 28.5%, up 180 bps on year.

The company's net profit for the September quarter includes an exceptional gain of INR 135.35 million on account of the transfer of investment in REFU Drive GmbH to Kalyani Powertrain Ltd. REFU Drive Gmbh was a joint venture between Bharat Forge and the German Prettl group. On Sept. 20, Bharat Forge transferred its stake in the joint venture to its wholly-owned subsidiary Kalyani Powertrain Ltd.

The company's revenue from its domestic business was INR 10.44 billion for the September quarter, up 12.2% from INR 9.31 billion in the year-ago quarter. In its domestic business, the company's commercial vehicle segment reported revenue of INR 2.20 billion, down 15.5% on year. The passenger vehicle segment reported revenue of INR 920 million, up 12.6% on year. The industrial segment posted revenue of INR 6.39 billion for the September quarter, up 25.8% on year.

Bharat Forge's revenue from its export business was INR 11.75 billion for the September quarter, down 8.7% from INR 12.87 billion in the year-ago quarter. In its exports business, the company's commercial vehicle segment reported revenue of INR 5.20 billion, down 5% on year. The passenger vehicle segment reported revenue of INR 2.77 billion, down 17.5% on year. The industrial segment posted revenue of INR 3.78 billion for the September quarter, down 6.4% on year. During the quarter, nearly 72.8% of the export revenue came from business in the Americas, followed by 22.6% from Europe, and around 4.6% from the Asia-Pacific.

For the September quarter, the company reported shipment tonnage of 64,098 tonnes, down 9.1% from 70,509 tonnes in the year-ago quarter. As of Sept. 30, the company's long-term debt was INR 12.84 billion, down from INR 17.11 billion on Mar. 31.

"Looking ahead into H2 FY25, we expect the performance to be stable as compared to H1 FY25 as we continue to focus on revenue growth and profitability improvement in our subsidiaries (Indian & Overseas)," said Chairman and Managing Director B.N. Kalyani.

The company announced it would make an equity investment of INR 11.22 billion in its three subsidiaries. It will invest INR 3.70 billion in Bharat Forge Global Holding GmbH, INR 5.45 billion in Bharat Forge America Inc., and INR 2.08 billion in Kalyani Powertrain Ltd. On Thursday, shares of the company closed at INR 1,328.75 on the National Stock Exchange, up 0.6%. End

Edited by Avishek Dutta

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