Bharat Forge (500493) Q3 24/25 earnings summary

Executive summary

• Quarterly and consolidated revenues declined YoY due to weak demand in key overseas markets, especially Europe, and lumpy defense business, but margins remained stable or improved, and new business verticals like casting and aerospace showed strong growth.

• Board approved unaudited results for Q3 and nine months ended December 31, 2024, and declared an interim dividend of Rs. 2.50 per share.

• New orders worth Rs 830 crore secured in Q3 FY25, with defense order book at Rs 5,706 crore as of December 31.

• Aerospace business investment approved for new machining and forging capacities, expected online in FY2027, with strong growth anticipated over 3-4 years.

• JS Auto posted 20% revenue growth and 24% EBITDA growth YoY, with expectations to surpass Rs 1,000 crore revenue in 2-3 years.

Financial highlights

• Standalone Q3 revenue at Rs 20,959 million, down 7.4% YoY; margin at 28.1%; net profit at Rs 3,686.8 million, up YoY.

• Consolidated Q3 revenue at Rs 34,756 million, down 10% YoY; EBITDA at Rs 6,378 million, margin improved by 100 bps YoY.

• Consolidated nine-month revenue at Rs 112,702 million; EBITDA up 9.1% to Rs 20,870 million; PBT up 15% to Rs 12,240 million.

• Export revenue for Q3 at Rs 11,510 million, down 5.2% YoY; domestic revenue at Rs 9,187 million, down 10% YoY.

• Overseas operations posted losses, with European manufacturing EBITDA at 1.1% and PBT before exchange loss at Rs (917) million.

Outlook and guidance

• Consolidated performance expected to remain stable in Q4 FY25 and FY26, with new business segments offsetting global automotive slowdown.

• Aerospace and JS Auto businesses expected to drive medium-term growth; manufacturing footprint review planned for overseas operations.

• Annualized run rate of Rs 10,000 million targeted for ferrous casting and JS Auto within 6-8 quarters.

• Margins in casting business expected to rise by 250-300 bps over two years.

• FY26 expected to be flat overall, with profitability improvement from reduced overseas losses.