Shares of Bharat Forge fell 4.01% to ₹1,060.40 in early trade after the company reported a 16% decline in net profit for Q3 FY24, citing a revenue miss despite a favorable product mix supporting margins.
Q3 Financial Performance
Bharat Forge posted a net profit of ₹212.78 crore, a 16% decline year-on-year, while revenue stood at ₹3,475.55 crore. The company’s total expenses came in lower at ₹3,165.37 crore, compared to ₹3,529 crore in the same period last year.
At the operational level, EBITDA fell 8% YoY to ₹609.7 crore, down from ₹663 crore in Q3 FY23. The EBITDA margin stood at 29.1%, slightly lower than the 29.3% recorded a year ago. Despite the weaker earnings, Bharat Forge announced an interim dividend of ₹2.5 per share (125%), which will be paid on March 12, with February 18 set as the record date.
The stock opened at ₹1,075.00 and touched a high of ₹1,085.00, but soon fell to ₹1,044.70, marking a new 52-week low. The previous close was ₹1,104.65, while trading volume stood at 4,27,297 shares.
Brokerages react to Bharat Forge Q3 results
Brokerages have offered mixed views on Bharat Forge’s Q3 performance and future outlook. Morgan Stanley, with an Overweight rating and a target price of ₹1,336, believes the company is well-positioned to benefit from the US Class 8 truck cycle recovery and strong growth in non-auto business verticals like aerospace and casting. However, it acknowledges that the weak Q3 EBITDA has been a key downside.
Jefferies has maintained a Buy rating with a target price of ₹1,200, expecting gradual margin recovery driven by cost efficiencies and product mix improvements, even though near-term demand remains subdued. Citi has taken a Neutral stance with a target of ₹1,150, citing earnings weakness but potential upside from a revival in domestic demand and future order wins. HSBC remains cautious with a Reduce rating and a target price of ₹1,050, highlighting slower growth in international subsidiaries and lower visibility in export demand.
Despite a weak Q3 performance, brokerages remain optimistic about Bharat Forge’s long-term growth potential, driven by favorable industry trends and an expected recovery in key business segments. However, margin pressures and lower-than-expected revenues remain key concerns. The stock hit a new 52-week low of ₹1,044.70, reflecting investor concerns over the company’s near-term profitability.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult their financial advisors before making any investment decisions.
