Bharat Forge (BFL) reported a 13.5% year-on-year (y-o-y) decline in net profit to Rs 269.42 crore for the June quarter, despite a 9.9% increase in revenue to Rs 2,338 crore. Margins expanded by 200 basis points to 28.1%.
On Thursday, BFL’s board approved a fundraise of Rs 2,000 crore. Amit Kalyani, vice-chairman and joint managing director of Bharat Forge, stated that these funds would be used to expand the company’s manufacturing footprint in India, through both greenfield and organic expansion.
Kalyani, during the company’s investor call, said that the capital raised would support the growth of both domestic and global businesses. He noted that the last time the company raised capital was in 2010-11, following the financial crisis, and there has been no capital raised since. The fundraising could be executed through equity, debt or a combination of securities, including further public offers, rights issues, American Depository Receipts (ADRs), Global Depository Receipts (GDRs), or Foreign Currency Convertible Bonds (FCCBs).
The company saw steady execution of defence export orders and a recovery in the oil & gas sector, Kalyani said. The group secured new orders worth Rs 980 crore across its defence, ferrous and aluminium castings, and core forging businesses.
BFL’s defence segment surged 147% to Rs 642 crore. With order wins amounting to Rs 775 crore, the executable order book as of June 30 stood at Rs 5,400 crore, comprising a mix of artillery guns, vehicles, and consumables. The company’s overseas operations recorded sales of Rs 1,320 crore, with an Ebitda of Rs 13 crore.
However, weak commercial vehicle (CV) demand in Europe was a downside in an otherwise stable quarter for international operations.
Looking ahead to Q2FY25, BN Kalyani, chairman and managing director, expressed optimism about continued positive momentum in the Indian operations across forging, castings, and defence sectors, as well as improvements in overseas operations. “We reiterate our expectation that these businesses will see an improvement in operational parameters resulting in a reduction of losses in FY25,” he said.
During the quarter, the company took an impairment charge of Rs 145.66 crore due to adverse impacts on Tork Motors, its electric motorcycle manufacturing subsidiary. Kalyani Powertrain, a wholly owned subsidiary of BFL, holds a 64.29% stake in Tork Motors.