Posted by company Net Profit Of 268.12 crores in the period to September 2022.
It needs to be noted that Bharat Forge’s PAT in Q3 FY22 was higher due to exceptional item gains. 95.93 crores. While the company posted an exceptional item profit 4.3 crore in Q3FY23.
profit before the occurrence of exceptional items 380.07 crore in Q3FY23 Vs. 328.73 crore in Q3FY22. But compared to Q2FY23 where profit before exceptional items was 358.45 crore, a decline recorded in the latest quarter due to rising interest costs.
On the top-line front, revenue from operations stood at 1,952.10 cr — from Q3FY23 registering a growth of 21.85% 1,602.09 crore in Q3FY23, up by over 4.73% 1,863.93 crore in Q2FY23.
Sequentially, the revenue growth was led by a 9.4% increase in export sales. Domestic revenue declined 1.7% due to lower PV production and seasonal weakness in tractors.
Further, EBITDA margin at 25.2% in Q3 improved by 90 bps QoQ driven by improved product mix.
In terms of segment-wise performance, on the domestic front, the quarter saw sequential growth in the company’s MHCV production, while passenger vehicle and LCV sector production declined by ~10% and 14%, respectively. BFL’s revenue from the PV segment has declined in line with industry volumes.
Meanwhile, the Industrial business continued to display a steady performance with the segment registering a flat sequential performance largely due to the weather in the Agriculture/Tractor segment. Q3FY22 revenue includes supply of oxygen cylinders, for which the normalized YoY performance is a 50% improvement.
Internationally, the commercial and passenger vehicle segments in automotive export revenue have witnessed growth on both QoQ and YOY basis. CV segment revenue grew by 5% while PV segment revenue grew by 10% sequentially.
Passenger vehicle revenue from exports was at a record high 267.1 cr. Bharat Forge expects this trend to continue as the demand remains.
On a geographic basis, Bharat Forge said, North America CV and PV volumes are showing strong growth due to fleet replacement and strong demand for personal mobility. While gloom prevails in the European automotive market, the only silver lining is MHCV truck volumes, which posted year-on-year growth in calendar year 22.
BN Kalyani, Chairman and Managing Director said, In Q3FY23, JSA’s performance saw a sequential growth of 20% in topline and 52% in EBITDA. During the quarter, they bagged new orders 153 crores.
To further enhance its presence in the casting space, Kalyani said, JSA has signed a BTA with Inda Shell Mold to acquire its SEZ unit at Sipcot, Erode. They expect the transaction to close by March 2023.
Further, in the third quarter of the current financial year, Bharat Forge bagged value contracts with KSSL 600 crores, taking the order book 1,950 crore by December 31, 2022.
Kalyani said that the fulfillment of these orders along with the export of Artillery Gun Systems will begin from the beginning of FY24.
Going forward, Kalyani said, “As we look ahead to Q4FY23, we expect the growth momentum to continue in both the domestic and export markets. Aided by the standalone performance, we expect That the new verticals will start registering meaningful contribution at a consolidated level and EPS accretion in FY24.”
On Bharat Forge’s financial performance, Mitul Shah, Head of Research, Reliance Securities, said, “We expect healthy growth in the domestic M&HCV industry as well as a potential recovery in Class 8 trucks on expectation of semiconductor easing in 1HFY24E.” We believe that with strong top-line performance and declining commodity costs, the company will be able to expand its margins from its current low levels and improve return ratios.”
According to Shah, BHFC’s leadership position in automotive forgings, focus on diversification, and expected cyclical recovery in core segments, support our positive outlook. In addition, its aggressive expansion in the defense sector will help drive revenue growth going forward.”
Presently, Shah said, “We have a buy recommendation on Bharat Forge. We will revisit our estimates after the management.”
Bharat Forge re-appointed BN Kalyani as Chairman and Managing Director for a term of 5 years from March 30, 2023 to March 29, 2028. Also, the company re-appointed GK Aggarwal as Deputy Managing Director for 1 year. Tenure with effect from April 1, 2023 to March 31, 2024.
At the time of writing this news, Bharat Forge’s share price was trading at 867.90 on the BSE, down 2.41%. The company’s market is over 40,400 crores.
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
catch all corporate news And updates on Live Mint. download mint news app to receive daily market update & Live business News,