Bharat Forge Q2 Results: Stock surges after Co says India biz will offset US slowdown

Bharat Forge Ltd. warned in its earnings presentation that it is witnessing exports to the North American market decline further in the second half of the current financial year given the challenging demand conditions.However, the company went on to add that the industrial business across India, exports to non-US geographies and a ramp-up in the company’s defence business will more than offset the weakness in the US exports.

In response to the company’s bullish commentary, the shares of Bharat Forge have seen a sharp recovery from the lows of the day to gain as much as 4%.

For the September quarter, Bharat Forge reported a 23% growth in its consolidated net profit to ₹299 crore, which is higher than the CNBC-TV18 poll of ₹236 crore.
Revenue for the quarter increased by 9.3% from last year to ₹4,032 crore, which was also higher than the CNBC-TV18 poll of ₹3,748 crore.Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter increased by 12.1% year-on-year to ₹726 crore, which is higher than the CNBC-TV18 poll of ₹612 crore.

EBITDA margins for the quarter expanded by 50 basis points from last year to 18%, also higher than the poll projection of 16.3%.

Bharat Forge said that it secured new orders worth ₹1,582 crore, including ₹559 crore within the defence business during the first half of the financial year, taking the total defence order book to ₹9,467 crore. Bharat Forge has transferred all the defence assets of the company to its wholly-owned subsidiary KSSL.

Shares of Bharat Forge are trading 2.7% higher after the results announcements at ₹1,356.