- Bharat Forge shares fell over 3% after a 9.6% drop the previous day on Q1 results
- Q1 standalone revenue grew 11.5% to Rs 2,347 crore but net profit declined 5.3%
- EBITDA margin narrowed to 24.9% from 27.1%, with earnings growth seen as modest
Bharat Forge extended their sharp sell-off for a second straight session on Tuesday, falling as much as 3.61% to Rs 2,032.70 on the BSE after a 9.6% plunge on Monday, as investors continued to digest a mixed June quarter (Q1FY27) performance.
At 10:15 am, Bharat Forge was trading 2.65% lower at Rs 2,053, while the benchmark BSE Sensex was down 0.47% at 78,170.
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The decline comes after the auto and defence major reported double-digit revenue growth but weaker profitability in Q1.
Standalone revenue rose 11.5% year-on-year (YoY) to Rs 2,347 crore, while EBITDA grew just 2.5% to Rs 585 crore. EBITDA margin narrowed sharply to 24.9% from 27.1% a year ago, while net profit fell 5.3% to Rs 321 crore from Rs 339 crore.
The muted earnings have triggered a cautious response from brokerages, although analysts remain constructive on Bharat Forge's longer-term defence and manufacturing opportunity.
Foreign brokerage Jefferies retained its 'Buy' rating with a target price of Rs 2,500, calling the quarter modest.
It cut its FY27-FY29 EPS estimates by 4%-16% on softer margins, delays in gun-order execution and higher capex, but continues to forecast around 30% EPS CAGR over FY26-FY29.
The brokerage expects an export recovery and defence ramp-up to drive earnings growth.
Morgan Stanley, on the other hand, retained its 'Overweight' rating and raised its target to Rs 2,469 from Rs 2,233, calling Q1 weak but viewing the correction as an opportunity to add.
It highlighted improving defence margins and said higher capex should position the company to capture upcoming manufacturing opportunities.
Goldman Sachs, however, retained its 'Neutral' rating with a Rs 2,120 target, saying Q1 earnings missed expectations.
It cited manpower shortages and the shutdown of the US PMT plant as key drags on profitability, while expecting visibility and profitability to improve across defence and adjacent businesses.
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