Bharat Forge Limited. (NSE: BHARATFORG) Ltd. : Q3 FY23 Results Out; Total Income rise 40% YoY

Bharat Forge Ltd (NSE: BHARATFORG) is a leading Indian multinational company engaged in the business of designing and manufacturing automotive components, powertrain solutions, and other engineered products. The company has a global presence with manufacturing facilities in multiple countries, and it caters to various sectors such as automotive, aerospace, railways, and defense. Bharat Forge has a strong focus on research and development and has collaborated with several global companies to enhance its product portfolio.

The company reported its financial results for the third quarter of fiscal year 2023, which ended on December 31, 2022. Despite strong growth in revenue from operations, Bharat Forge’s standalone net profit for Q3FY23 declined by 14.29% year-on-year (YoY) to INR 289.18 crore, compared to INR 337.39 crore in the same period last year. However, sequentially, the company’s profit after tax (PAT) increased by 7.85%, from INR 268.12 crore in Q2FY23. The decline in PAT is due to a higher exceptional items gain of INR 95.93 crore in Q3FY22 compared to INR 4.3 crore in Q3FY23.

Bharat Forge’s revenue from operations for Q3FY23 stood at INR 1,952.10 crore, a growth of 21.85% YoY, driven by a 9.4% increase in export sales. However, domestic revenues declined by 1.7% due to lower passenger vehicle (PV) production and seasonal weakness in the tractor segment. Sequentially, revenue increased by 4.73% from INR 1,863.93 crore in Q2FY23. The company’s EBITDA margin for Q3FY23 stood at 25.2%, improving by 90 basis points (bps) quarter-on-quarter (QoQ), driven by a better product mix. In terms of segment-wise performance, the industrial business continued to display stable performance, with the segment registering flat sequential performance largely due to seasonality in the agri/tractor segment.

On the domestic front, in the quarter, the company’s medium and heavy commercial vehicle (MHCV) production witnessed sequential growth, while the PV and light commercial vehicle (LCV) sector production declined by around 10% and 14%, respectively. Bharat Forge’s revenues from the PV segment declined in line with industry volumes.

Internationally, automotive export revenues have witnessed growth on both QoQ and YoY basis across commercial and PV segments. PV export revenue was at a record high of INR 267.1 crore. Bharat Forge expects this trend to continue as demand sustains. On a geographical basis, the North American commercial vehicle (CV) and PV volumes continued to show robust growth on the back of fleet replacement and strong demand for personal mobility.

Bharat Forge’s Chairman and Managing Director, B.N. Kalyani, said that in Q3FY23, joint venture company (JSA) performance witnessed a sequential growth of 20% in topline and 52% in EBITDA. During the quarter, they secured new orders worth INR 153 crore. To further grow its presence in the castings space, JSA has signed a build-to-acquire (BTA) with Inda Shell Mould to acquire its SEZ unit in SIPCOT, Erode. The company expects the transaction to close by March 2023.