Bharat Forge, one of the leading automotive and defence suppliers has reported its financial result for Q1 FY2024. The revenue came at 2,123 crore, up 21 percent YoY, EBITDA at Rs 553 crore with a margin of 26 percent and the net profit came at Rs 421 crore, up 19 percent compared to Rs 353 crore for t he same period last year.
The company has attributed the strong performance on the back of new order gains worth Rs 200 crore from its core business, a combination of orders from passenger vehicles and industry segments. This was also aided by strong orders from defence business.
Baba N Kalyani, Chairman and MD, Bharat Forge said, “A very significant milestone was achieved in the quarter by our defence subsidiary, KSSL, with the commencement of supplies of Artillery systems as part of the export order won last year. In Q1 FY24, we won cumulative orders worth Rs 277.8 crore in defence from multiple customers and product segments, to be executed over the next 18 months. The defence order book is increasing steadily and over a period will encompass orders across artillery systems, armoured vehicles, components, solutions for Naval forces and Unmanned systems.”
Make-in-India and new investments
He further states that as part of the government’s ‘Atmanirbhar Bharat’ push in defence, this will also mark the beginning of Bharat Forge’s journey into product domains where he expects the share of the same to increase meaningfully in the coming years.
The company also has approved additional investments upto Rs 150 crore in Kalyani Powertrain, which houses its electronic vehicle business, from time-to-time, in one or more tranches.
Furthermore, an investment of Rs 1,000 crore will be done during FY2024-26 to expand local capacity, which would be funded out of internal accruals, said Amit Kalyani, Deputy MD, Bharat Forge.
“As we progress ahead in FY24, we expect consolidated EBITDA to increase from current levels of 16% along with improvement in Return Ratios. For the standalone business, the demand environment remains benign across sectors and geographies, we expect stable demand coupled with ramp-up of new business to drive topline growth in FY24. Our Last Man Standing strategy is bearing results with the company signing LTA going upto 2035 will all our key customers. We are undertaking a fairly large and diversified capex program in India to create capacity in our core business, EV components & systems and Defence Products. These capacities and facilities will come online in a phased manner over the FY24-FY26. This capex will be funded out of internal cash accruals,” concluded Kalyani.
