Bharat Forge (500493) Q1 24/25 earnings summary

Executive summary

• Consolidated revenue grew 6% YoY to INR 4,106 crore, with EBITDA up 23% YoY and PBT up 30% YoY, driven by strong defense and oil & gas performance.

• Standalone revenue rose 10% YoY to INR 2,338 crore, with EBITDA margin at 28.1% and PBT up 24% YoY.

• Board approved fund raising up to INR 2,000 crore (₹20,000 million) via equity, debt, or convertible securities, subject to approvals.

• Overseas operations are recovering, with European EBITDA at INR 37 crore and reduced losses in the U.S.; conversion of a USD 12 million loan to equity in the US subsidiary to reduce interest burden.

• Several corporate actions: transfer of stakes, closure of non-operational subsidiaries, and capital reduction in a subsidiary.

Financial highlights

• Consolidated Q1FY25 revenue: INR 4,106 crore (₹41,061 million), up 6% YoY; EBITDA: INR 759 crore (₹7,592 million), up 23% YoY; EBITDA margin improved by 260 bps YoY to 18.5%.

• Standalone Q1FY25 revenue: INR 2,338 crore (₹23,381 million), up 10% YoY; EBITDA margin: 28.1%; PBT up 24% YoY.

• Standalone net profit for Q1 FY25: ₹2,694 million, down 13.5% YoY due to exceptional items.

• Consolidated net profit for Q1 FY25: ₹1,746 million, down from ₹2,137 million YoY, due to impairment provisions.

• Domestic revenue grew 23.9% YoY; export revenue remained flat YoY.

Outlook and guidance

• Defense business expected to exceed 50% growth for the year, with lumpy order execution.

• Aerospace business projected to grow 15-20% this year, with strong double-digit growth next year.

• Overseas subsidiaries, especially Europe, expected to show substantial improvement by year-end; U.S. losses to reduce significantly by Q4.

• Positive momentum expected in Indian entities across forging, castings, and defense for Q2 FY25.

• Board authorized fund raising up to ₹20,000 million to support growth and strategic initiatives.