Bharat Forge Q2 Results: Shares fall 3% after co flags weak overseas business, maintains 20-25% FY27 India manufacturing growth outlook

Bharat Forge Ltd. reported a mixed set of results for the September quarter (Q2FY27) on Thursday, November 5, with revenue growth exceeding analyst estimates, while EBITDA and net profit fell short of the CNBC-TV18 poll. Shares of the company declined over 3% following the results.

On a consolidated basis, Bharat Forge reported a net profit of ₹278.6 crore for the quarter, down 7% year-on-year, compared with ₹299 crore in the corresponding period last year. The CNBC-TV18 poll had estimated a net profit of ₹342 crore.

Revenue for the quarter increased 21% year-on-year to ₹4,870 crore, beating the CNBC-TV18 poll estimate of ₹4,765 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at ₹768 crore, compared with ₹726 crore in the year-ago period. However, the figure was below the CNBC-TV18 poll estimate of ₹794 crore.

The EBITDA margin came in at 18.8%, expanding 80 basis points from the year-ago period. This was also higher than the poll estimate of 16.7%.

Management commentary and business updates

Bharat Forge maintained its expectation of 20-25% revenue growth in FY27 for its Indian manufacturing business.

The company said manufacturing of the Advanced Towed Artillery Gun System (ATAGS) would begin in FY27, with revenue recognition expected to start from the beginning of FY28.

However, the company flagged weak performance across some of its international businesses. It said it was undertaking a strategic review of its overseas operations, where performance continues to remain below expectations.

On the margins front, standalone EBITDA margin declined to 25.9% from 26.2% a year ago. Margins at Kalyani Strategic Systems Ltd. (KSSL), the company’s defence business, fell to 10.7% from 17.2%. The company also flagged lower margins in its US and other overseas businesses, with some operations reporting negative margins.

Shares of Bharat Forge were trading 3% lower at ₹1,773.70 following the results announcement on Thursday. Despite the decline, the stock remains up over 20% so far this year.