Bharat Forge earnings surge 63% in Q1, reaching INR 284 crores
In the first quarter of the current financial year, Bharat Forge, a leading manufacturer of critical and safety components, reported a standalone profit after tax (PAT) of ₹339 crore. Despite facing challenging market conditions in export markets due to US tariffs and regulatory uncertainties, the company's resilience shone through.
The company's standalone revenue for Q1 FY26 was ₹2,105 crore, a 2.7% quarter-on-quarter decline, with exports seeing a drop of about 12.7%. However, the EBITDA margin remained strong at 27.9%, with EBITDA standing at ₹588 crore. On a consolidated basis, revenue was ₹3,909 crore, with an EBITDA margin of 17.5% and profit before tax (PBT) of ₹423 crore before exceptional items.
The key challenges for Bharat Forge lie in the subdued demand in export markets, particularly the US, where recent tariff announcements and emission regulations have created uncertainty. This has led to a cautious outlook on the US export business for the rest of FY26. The company expects FY26 to be a challenging period due to the overall market cycle and geographic exposure.
However, the company's performance highlights some positive aspects. The domestic business and defense orders were key growth drivers, with new orders worth ₹847 crore secured in Q1, including ₹269 crore from the defense sector. This has increased the total defense order book to ₹9,463 crore. Defence revenue surged significantly, supported by new orders totaling ₹980 crore, indicating a 147% revenue increase in that vertical.
The company's US and European operations showed improvement in financial performance, generating cash profit in the Apr-Jun quarter. The ongoing review of European steel manufacturing footprint is expected to conclude with concrete steps by the end of the year.
Looking ahead, Bharat Forge plans to focus on capturing business opportunities in less affected geographies and segments. The emphasis will be on cost optimization to counter the impact of operating deleverage. The company expects new defence orders in FY26 to enhance revenue visibility in coming years. Additionally, the board has approved fundraising of up to ₹2,000 crore to drive growth initiatives and debt optimization.
Meanwhile, Navratna NALCO, another key player, secured new orders worth Rs 847 crore in Q1 FY26, including Rs 269 crore in Defense. The company's net profit surged 77% to Rs 1,064 crore in Q1 FY26.
In a separate development, Bharat Forge, an auto components maker based in Pune, reported a 63% increase in consolidated net profit to Rs 284 crore for the June quarter of 2022.
[1] Source: Livemint [2] Source: Economic Times [3] Source: Business Standard [4] Source: Moneycontrol
The company's strategic focus on capturing business opportunities in less affected regions and segments, as well as cost optimization, could potentially help it navigate the challenging industry and business landscape, especially considering the current uncertainties in the US export market, which is a key area of financing and trade. The strong performance of Bharat Forge's defense orders, with a significant surge in revenue and new orders secured, indicates potential growth in the energy sector, especially in the defense and aerospace sub-sectors.
