Bharat Forge Ltd share Price

Bharat Forge (BFL) is India’s leading auto component exporter with strong engineering, technological competencies in forging and metallurgy. With total capacity of 6.83 lakh MT per annum, its products find application in domestic, exports markets across PV, CV, oil & gas, construction & mining, power, defence, etc.

• FY22 standalone segment mix – ~30% CV, ~47% industrial, ~12% PV
• FY22 standalone export mix - ~68% America, ~29% Europe, ~3% other

BFL reported a steady performance in Q4FY22.

• Standalone sales were up 4.5% QoQ to ₹ 1,674 crore, tonnage up 7.8% QoQ
• EBITDA was at ₹ 431 crore, with margins up 30 bps QoQ to 25.8%
• PAT was down 22.4% QoQ to ₹ 262 crore (exceptional gains in Q3FY22)
• For FY23, management commentary is upbeat on demand prospects & revenue from new verticals (including EV)

Other Industrial Products company Bharat Forge announced Q1FY24 results:

• Revenues at Rs 21,273 million in Q1FY24 grew by 21% YoY driven by 12.5% growth in export and 33.6% growth in domestic revenue. Domestic revenues in Q1FY24 also include the supply of an artillery system to KSSL for the defence export order won last year.
• EBITDA margin at 26% in Q1FY24 was relatively flat compared to Q1FY23.
• PBT before Exchange gain/ (loss) was Rs 4,211 million in Q1FY24 as against Rs 3,532 million in Q1FY23 driven by higher volumes in core business and defence business.

B. N. Kalyani, Chairman & MD, Bharat Forge, said, “During the quarter, standalone revenues from operations rose by 21% YoY to Rs 21,273 million, the highest so far for the company. EBITDA & PBT grew by 20% and 27% respectively. A new business worth Rs 200 crore was secured in the core business, a combination of orders from Passenger Vehicles and the industrial segment.

A very significant milestone was achieved in the quarter by our 100% defence subsidiary, KSSL, with the commencement of supplies of Artillery systems as part of the export order won last year. In Q1FY24, we won cumulative orders worth Rs 277.8 crore in defence from multiple customers and product segments, to be executed over the next 18 months. The defence order book is increasing steadily and over a period will encompass orders across Artillery systems, Armored vehicles, components, solutions for Naval forces, and Unmanned systems. Aligned with the government's ‘Atmanirbhar Bharat’ push in defence, in addition to Artillery systems and specialty vehicles, this marks the beginning of our journey into the other product domain, and expect the share of the same to increase meaningfully in the coming years.

In the overseas business, the European operations have posted an EBITDA of Rs 51 crore in this quarter as against a loss of Rs 14 crore in the previous quarter while the US operation have posted an EBITDA loss of Rs 35 crore in the quarter. Subject to conducive end demand, we expect the US business to turn around by Q4FY24.

The acquisition of ISML’s assets has been completed during the quarter at a cost of around Rs 55 crore. This acquisition further strengthens our presence in the casting space.

As we progress ahead in FY24, we expect consolidated EBITDA to increase from current levels of 16% along with improvement in Return Ratios. For the standalone business, the demand environment remains benign across sectors and geographies, we expect stable demand coupled with the ramp-up of new business to drive topline growth in FY24. Our Last Man Standing strategy is bearing results with the company signing LTA going up to 2035 will all our key customers. We are undertaking a fairly large and diversified capex program in India to create capacity in our core business, EV components & systems, and Defence Products. These capacities and facilities will come online in a phased manner over FY24-26. This capex will be funded out of internal cash accruals.”

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