Bharat Forge Ltd. reported a consolidated net loss of Rs 90 crore for the June quarter, against a profit of Rs 284 crore a year earlier, after the company recognised a one-time loss of about Rs 358 crore. Revenue rose 18.7% year-on-year, while Ebitda increased 5.5%, although the operating margin narrowed.
The net loss was significantly below the Street estimate of a Rs 363 crore profit. Revenue at Rs 4,640 crore was broadly in line with the estimate of Rs 4,659 crore, while Ebitda at Rs 710 crore missed the estimate of Rs 809 crore. The Ebitda margin stood at 15.3%, against an estimate of 17.4%.
Bharat Forge (Q1, Consolidated YoY)
- Net loss at Rs 90 crore versus profit of Rs 284 crore.
- Revenue up 18.7% at Rs 4,640 crore versus Rs 3,909 crore.
- EBITDA up 5.5% at Rs 710 crore versus Rs 673 crore.
- EBITDA margin at 15.3% versus 17.2%.
The company reported an exceptional loss of Rs 358 crore in the quarter. The charge was linked mainly to restructuring at its German subsidiary Bharat Forge CDP GmbH, which is facing market challenges and cost disadvantages. The subsidiary recorded incidental restructuring expenses of Rs 26.7 crore and a restructuring provision of Rs 330.4 crore during the quarter.
Revenue Growth
Consolidated revenue from operations rose to Rs 4,640 crore from Rs 3,909 crore a year earlier. The company reported an operating margin of 15.05% for the quarter, compared with 17.13% in the year-ago period.
Bharat Forge's consolidated business is divided into three reporting segments: Forgings, Defence and Others. The Forgings segment covers forged products and machined components for the automotive and industrial sectors, while Defence covers products used in defence-related activities.
German Restructuring
Bharat Forge said its German subsidiary BF CDP is facing market challenges and cost disadvantages and has initiated restructuring measures. As part of the restructuring, the subsidiary reached an in-principle understanding with its Works Council to implement a social plan, leading to the restructuring provision recorded during the quarter.
The company also recorded an Rs 8.9 crore expense related to a voluntary retirement scheme during the quarter.
The board approved the company's consolidated financial results on Aug. 10. It also approved a proposal to raise funds through equity or debt-linked securities, subject to shareholder and regulatory approvals, and approved the incorporation of a subsidiary in Malaysia for semiconductor and allied activities.
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