Bharat Forge’s Q2FY24 Quarter Results

• Bharat Forge reported 2.9% quarter-on-quarter (QoQ) decrease in its consolidated revenues for the quarter ended September (Q2FY24). On a year-on-year (YoY) basis, it witnessed a growth of 22.6%.
• Its expenses for the quarter were down by 3.2% QoQ and up by 20.9% YoY.
• The net profit grew 0.5% QoQ and 51.8% YoY.
• The earnings per share (EPS) of Bharat Forge stood at 4.9 during Q2FY24.

Bharat Forge’s Financial Statements for Q2FY24:

Key Result Highlights

• The company registered a strong performance across segments & geographies during the quarter, with robust YoY growth in revenues and in profitability.
• EBITDA margins expanded driven by operating leverage and a sharp focus on cost control.
• The strong financial performance and debt reduction of Rs 307 crores resulted in return on capital employed ROCE (net-of-cash) inching closer to the 20% mark.
• Passenger Vehicles has been a standout sector for the company over the past few quarters and it continues to rise driven by market share gains, increasing value addition and order wins from newer geographies & customers.
• This sector account for almost 25% of the company’s exports and as per the management, it will continue to be a key contributor to the growth of the group.
• In H1 FY24, the standalone business secured new orders worth Rs 740 crores across various segment including Rs 300 crores for E-Mobility programs.
• The defence business continues to move from strength to strength in terms of execution and order wins.
• During the quarter, the company’s defence vertical, KSSL secured new business worth Rs 1,100 crores taking the executable order book to Rs 3,000 crores, over the coming 24 months.
• Excluding the impact of seasonally weak quarter in the European market, the overseas operations performance showed improvement consistent with the increase in capacity utilization of the Aluminum business.

Management Outlook

• As per the management, a sustained path to profitability for the overseas business is going to be driven by a combination of achieving profitability in the aluminum business and product/manufacturing optimization in the steel business, all expected to materialize in the next 12 – 18 months.
• Barring any untoward global disturbances which may impact demand sentiment, the management expects the momentum in businesses to continue in H2 FY24 performance along with strong cash flow generation.
• The Indian passenger vehicle (PV) business remains well-placed for growth driven by premiumization and the shift towards Utility Vehicle within the PV space. The management expects this trend to continue supported by burgeoning middle class & higher disposable income.

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