Bharat Forge (500493) Q1 24/25 earnings summary

Executive summary

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

• Standalone revenue rose 10% YoY to INR 2,338 crore, with EBITDA margin at 28.1% due to defense and oil & gas growth.

• Strong order wins of INR 980 crore across defense, aluminum, ferrous castings, and core forging.

• Defense business ramping up, with order book at INR 5,400 crore and expected annualized run rate of INR 2,500 crore.

• Board approved fund raising up to INR 2,000 crore (₹20,000 million) for growth investments in India, both organic and inorganic.

Financial highlights

• Consolidated EBITDA margin improved by 260 bps YoY to 18.5%, driven by Indian entities.

• Standalone EBITDA grew 18.9% YoY; consolidated ROC at 18.4% as of June 2024.

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

• Consolidated net profit for Q1 FY25: ₹1,745.75 million, down from ₹2,137.30 million YoY, due to impairment provisions.

• GSA Auto posted nearly 50% YoY EBITDA growth.

Outlook and guidance

• Defense business expected to exceed 50% growth for the year, maintaining profitability.

• Aerospace segment 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. recovery anticipated by Q4.

• Domestic CV market expected to be flat ±5% for the year, with stronger H2.

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