Share price of Bharat Forge Ltd. fell as much as 9% in the day's trade, after the firm's announced a net loss of Rs 90 crore for the June quarter, against a profit of Rs 284 crore a year prior, this was due to an exceptional loss of Rs 358 crore in the quarter.
Shares of the company were trading at a downturn of 6.93% to Rs 2,108.20 at 3:05 p.m.
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Bharat Forge's revenue rose 18.7% year-on-year, while Ebitda increased 5.5%, the operating margin narrowed. The net loss was notably lower than the Street estimate of a Rs 363 crore profit. Revenue was at Rs 4,640 crore, which was broadly in line with the estimate of Rs 4,659 crore, while Ebitda (earnings before interest, taxes, depreciation and amortisation) was 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 Highlights (Cons,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 firm's aforementioned exceptional loss was linked to 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.
Energy prices hit the company's margins by 130 basis points, according to Amit Kalyani, vice chariman and joint managing director of Bharat Forge Ltd.
He further stated that the production related issues and high energy costs in the US also impacted the margins. The margins would have been at 28% if the energy prices had not shot up, as per the senior executive.
The company lowered also lowered its guidance due to an expected demand slowdown. Kalyani stated that the company is seeing large opportunities in high-value sectors. Seeing immense opportunities in defence, aerospace.
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The firm is also planning to raise Rs 2,500 crore to fund its growth for the next three years. The company is raising capital solely to fund its capacity expenditure, as per Kalyani.
The firm's results for FY27 are largely expected to be supported by a mix of profitbility and productivity. The FY27 margins for its manufacturing business are expected to be at 22-23%.
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