Bharat Forge share price down 14% post Q3 results: Expects domestic and export markets to see growth moderation.

Bharat Forge share price declined 13.92% post its Q3 performance reported on Monday.  

Bharat Forge reported consolidated net profit for the quarter ending December at ₹244.52 crore against loss of ₹35.80 Crore in the year ago quarter. The net profit however was lower than ₹ 260 Crore in the previous quarter. 

The Profit before tax grew by 85% on a YoY basis and the same was driven by improvement in performance at KSSL (Kalyani Strategic Systems) and reduction in losses in the international business.

Its consolidated Earnings before interest tax depreciation and amortisation (Ebitda) margins also  improved by 450 bps driven by initial signs of turnaround in the international businesses. The consolidated EBITDA grew by 56% to ₹672.7 Crore.

The consolidated revenues increased by 15% on a YoY basis driven by contribution from all businesses to ₹3866.4 crore.

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In the overseas operations, we have been able to achieve improvement in operational parameters at the Aluminum business in Europe and the same is expected in the US plant soon, said B.N. Kalyani, Chairman & Managing Director of Bharat Forge in a statement. He added that we continue to work on creating a sustained path to profitability for the overseas business driven by a combination of achieving profitability in the aluminum business and product/manufacturing optimization in the steel business, all expected to materialize in the next 12 – 18 months.

During the quarter, the company has secured new business worth ₹550 Crores across Automotive, Industrial, Defence, Aerospace and Castings (Ferrous & Aluminum).

Exports from Indian manufacturing operations across components, defence & Industrial in Q3 FY24 stands at $ 200 million, a growth of 36% over Q3 FY23. 

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“Over time, We  expect this number to grow as the new verticals scale up and we enhance our presence in the industrial space” said B.N.Kalyani

However while the expectations remain high on growth and street has been upbeat that led the stock scale 52-week highs of ₹1300 on Monday prior to results, the disappointment came with company indicating moderation in growth

B.N. Kalyani said that “Looking ahead in the Q4 & further into FY25, we expect the growth momentum to moderate in both Domestic & Export market across industries” . He added that "Our endeavor will be to  outperform the market driven by our diversified business mix.”

Bharat Forge revenues have increased by 15% on a year-on-year basis driven by contribution from all businesses