Bharat Forge Ltd. Q2 Results

Last Updated on November 8, 2023 by BFSLTeam BFSLTeam

On 6 November 2023: Bharat Forge Ltd. (BSE, NSE: BHARATFORG) announced its Q2 2023-24 financial results, generating healthy performance across sectors as well as geographies with Revenues standing out with strong growth and Profitability taking centre-stage too. 

Result Takeaways Of Bharat Forge

Here are the overall Consolidated highlights of Q2 results:

• Revenues have hit a bright spot as they have increased by 23% YoY. This result is driven by contributions from all segments of the business.
• EBITDA Margins have shown improvement by 260 bps and this has been driven by an improvement in capacity utilisation. EBITDA has gone up by 45%. 
• Profit Before tax has risen by 43% YoY, driven largely by improvement in the performance of European operations plus KSSL. 

Additional Read: Q2 Results Dashboard

Review of the Indian Business

Here are some insights into certain segments of the overall business of the company regarding the Indian market:

• Q2 saw the realisation of 12% YoY growth for the CV business for H1. This has outperformed the market. The long-term trajectory for this sector appears promising as this is motivated by the focus of the government on positive economic activity and infrastructure spending. 
• The India PV business is in a promising position where growth is concerned. This is the result of a shift in demands for utility vehicles within the area of PVs, not to mention the rise of the middle class and disposal income. 
• In terms of the Industrial Business area for the Indian market, there has been stellar YoY performance due to the revival in the space of infrastructure and capital goods prompting a healthy order pipeline. 

Exports Across Geographies

Here are some highlights of the export results of Q2:

• Exports to the Americas have proved the most profitable and stand at ₹815.1 Cr for Q2 compared with ₹718.6 Cr in Q2 FY 22-23. 
• Exports to Europe and Asia have also risen QoQ, compared to the same quarter of the previous fiscal year. This is because markets in these regions are facing a gradual recovery. 
• The total exports of the company in Q2 stood at ₹1,287.1 Cr, while they were at ₹1,066.4 Cr in Q2 FY 22-23. 

Also Read: Bharat Forge Share Price

Management Commentary

The Chairman and MD of Bharat Forge shared the consolidated results of the company and indicated the following: 

• The company has recorded a robust performance in Q2 across geographies as well as segments. Revenue growth stands at 20.7% YoY and Profits at 29.3% up. 
• EBITDA Margin is up by 310 bps and stands at 27.4%. This has been driven by leverage in operations and a sharp concentration on the control of costs. 
• The sound financial performance and the reduction of debt of ₹307 Cr have resulted in an ROCE close to the 20% level. 
• Over the past few quarters, and in Q2, the segment of passenger vehicles (PVs) has stood out and drives value addition and order wins across clients and geographies. In the present state of the company’s performance, this is a sector that accounts for nearly 25% of the company’s total exports. This will continue to be a vital contributor to the company’s growth. 
• The Defence Business has continued to move from strength to strength with implementation and order wins prompting growth. In Q2, this vertical secured order wins worth ₹1,100 Cr spurring the book order to reach highs for the coming months. 
• The European markets have been slightly muted due to seasonality factors, but the Aluminium Business has seen improvement in other markets overseas. 
• The company expects to see a growth momentum in the months to come, barring any unforeseen global disturbances. 

About Bharat Forge Ltd.

Bharat Forge Limited is a multinational enterprise, in India, engaged in the operations of forging, energy, railways, automotives, marine, mining, construction, aerospace as well as defence industries.

The company, formed by Neelkanthrao A. Kalyani in June 1961, has its headquarters in Pune, in the Indian state of Maharashtra. It stands to be the flagship firm under the Kalyani Group helm. Bharat Forge’s Special Economic Zone (SEZ) known as Khed City spans 1,000 hectares (4,200 acres) of land area in Khed taluka. It is the biggest SEZ in the district of Pune. Bharat Forge was the first company that was actively promoted by the Kalyani Group and today, it stands to be the Group’s flagship organisation. 

Bharat Forge manufactures products such as steering knuckles, front axle beams, crankshafts, and connecting rods. The company’s recent strategy involves augmenting a robust international footprint in Lightweight Materials. In the company’s efforts to mitigate risk, Bharat Forge has diversified into various sectors of industry including infrastructure, oil and gas, and marine. The largest customers of Bharat Forge include VW Group, Daimler Group, Dana, Meritor, etc. Besides its major operations, the company has also forged a healthy collaboration with large truck manufacturers. In terms of the present industry, the company has the distinction of being among one of the global dingle-location forging facilities consisting of advanced machining systems and entirely automated forging press lines.

---

Source:

https://www.bseindia.com/xml-data/corpfiling/AttachLive/b6390d06-3a39-4003-be58-f086f22fe96c.pdf