Bharat Forge (500493) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was resilient, with consolidated revenue at Rs 36,885 million, down 2.3% YoY, and standalone revenue flat at INR 2,247 crores, as margin expansion offset European weakness; strong performance in defense and Indian subsidiaries.

• Defense revenue in Q2 rose 67% YoY to INR 509 crores, with an order book of INR 5,900 crores as of September 30; new orders in H1 totaled INR 2,200 crores, mainly from defense.

• Board approved unaudited financial results for Q2 and H1 FY25, with strategic investments in subsidiaries and an acquisition announced.

• Overseas operations faced sluggish European demand, but U.S. and Indian markets showed resilience.

• Strong balance sheet with improving return ratios, reduced leverage, and robust cash flows position the company for future opportunities.

Financial highlights

• Standalone Q2 margin expanded by 140 bps to 28.8%; consolidated EBITDA margin up 220 bps to 18.7%.

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

• Standalone net profit for H1 FY25 was ₹6,305.86 million; consolidated net profit was ₹4,178.71 million.

• Gross debt to equity at 0.46x standalone, consolidated at 1.00; cash on hand near INR 2,000 crores.

• JS Auto posted strong Q2 performance with improved revenue, margins, and INR 173 crores in order wins in H1.

Outlook and guidance

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

• India expected to benefit from post-election government spending, supporting CV and agro markets; U.S. market remains strong.

• Aerospace business expected to grow substantially, with new orders exceeding last year’s total revenue.

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

• EV vertical expected to reach EBITDA break-even in 2-3 quarters.