Bharat Forge FY25 Results Show Margin Strength Despite Profit Dip

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Bharat Forge FY25: Navigating Market Volatility with Strategic Resilience May 09 2025Results

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Bharat Forge, a global leader in forging and engineering solutions, reported its financial results for the fiscal year ending March 31, 2025. The company showcased resilience amidst challenging market conditions, marked by a decline in revenue and net profit but an improvement in operational margins.

Consolidated Revenue: Rs 15,123 crore, a marginal decline from Rs 15,682 crore in FY24.
Net Profit: Rs 1,322 crore, down 7.2% year-on-year.
EBITDA: Rs 2,524 crore, with margins improving to 28.5%, up from 27.3% in the previous year.
Final Dividend: Rs 6 per equity share, subject to shareholder approval.

In Q4 FY25, the company reported a net profit of Rs 345.6 crore, a 12% decline from Rs 390 crore in Q4 FY24, and revenue of Rs 2,163 crore, down 7.1% year-on-year.

Operational Performance

Despite the revenue decline, Bharat Forge achieved an EBITDA margin of 28.5% in Q4 FY25, slightly higher than the 28.3% reported in the same quarter of the previous year. This improvement reflects the company's focus on cost optimization and a favorable product mix.

The company's ferrous castings business demonstrated strong performance, with revenues growing by 23%, EBITDA increasing by 35%, and profits doubling compared to FY24.

Defence and Aerospace Segments

Bharat Forge secured new orders worth Rs 4,343 crore in Q4 FY25, including Rs 3,417 crore towards the Advanced Towed Artillery Gun System (ATAGS) program. As of March 2025, the defence order book stood at Rs 9,420 crore. For the full fiscal year, the company secured orders worth Rs 6,959 crore, with defence accounting for 70% of the total.

However, the defence segment's revenue declined by 49.29% to Rs 284.35 crore in Q4 FY25, indicating potential challenges in execution or delivery schedules.

Export Market Dynamics

Exports constitute approximately 30% of Bharat Forge's consolidated revenues. In Q4 FY25, the company witnessed a sequential recovery in exports, with revenue increasing to Rs 1,232 crore from Rs 1,151 crore in Q3. However, year-on-year, exports declined slightly from Rs 1,249 crore in Q4 FY24.

The Americas remained the most resilient export market, contributing Rs 816 crore in Q4, supported by steady demand. In contrast, the European market continued to face challenges, impacting the overall export performance.

Strategic Initiatives and Outlook

Looking ahead to FY26, Bharat Forge is focusing on several strategic initiatives to enhance profitability and operational efficiency:

E-Mobility: Reducing losses in the E-Mobility vertical through operational improvements.
European Operations: Evaluating options for the steel business in Europe to address ongoing challenges.
Aluminium Business: Enhancing operational performance in the aluminium segment to reduce losses.
North American Market: Leveraging manufacturing capabilities in North America to secure new business opportunities.
AAM India Integration: Integrating the AAM India business in FY26 to expand the product portfolio and strengthen the company's presence in India.

B.N. Kalyani, Chairman and Managing Director of Bharat Forge, emphasized the company's commitment to improving consolidated profitability through these internal actions.

Conclusion

Bharat Forge's FY25 performance reflects the company's resilience in navigating a complex market environment. While facing revenue and profit declines, the company has demonstrated operational strength through improved margins and a robust order book in the defence sector. Strategic initiatives aimed at enhancing efficiency and expanding market presence position Bharat Forge for potential growth in FY26.

For more information, visit https://www.indiratrade.com/

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