Bharat Forge (500493) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 consolidated revenue was Rs 3,689 Crore, down 2.3% YoY due to European automotive weakness, but EBITDA rose 10.8% YoY with margin up 220 bps to 18.7%.

• Standalone Q2 performance was resilient with flat revenue at INR 2,247 crores and margin expansion, despite weak demand in Europe.

• Defence business revenue surged 67% YoY to Rs 509 Crore; order book at Rs 5,900-6,000 Crore as of September 30.

• Strong order wins in H1 totaling INR 2,216 Crores, with defence contributing INR 1,400 Crores.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024.

Financial highlights

• Q2 standalone margin expanded by 140 bps to 28.8% due to favorable product mix; standalone EBITDA at Rs 6,477 million, up 5.1% YoY.

• H1 consolidated revenue grew 2% YoY to INR 7,795 crores; EBITDA up 16.8% to INR 1,449 crores; PBT up 24.5% to INR 872 crores.

• Standalone revenue from operations for H1 FY25: ₹45,847.62 million, up from ₹43,766.71 million YoY.

• Consolidated revenue from operations for H1 FY25: ₹77,946.54 million, up from ₹76,514.56 million YoY.

• Exceptional items include a provision for impairment of ₹1,517.65 million related to Tork Motors Pvt Ltd in consolidated results.

Outlook and guidance

• Challenging demand in Europe; India expected to improve with post-election government spending.

• H2 FY25 expected to be stable versus H1 FY25, with continued focus on growth and profitability in Indian and overseas subsidiaries.

• Aerospace business expected to grow substantially, with annualized order wins exceeding last year’s revenue.

• Defense business guided for strong YoY growth; new domestic orders (e.g., ATAGS) expected by FY-end.

• Board approved further equity investments in subsidiaries to support strategic growth.