Pune-based forging firm Bharat Forge Ltd. has reported a remarkable surge of over 220 percent in its year-on-year consolidated net profit for the December quarter of 2023, attributed to increased revenues.
The company’s consolidated net profit for the quarter soared to Rs 254.45 crore, marking a substantial 223 percent rise from Rs 78.71 crore reported last year. Revenue also witnessed a notable uptick, jumping 15.7 percent to Rs 3922.96 crore compared to Rs 3389.95 crore in the previous year.
The growth was fueled by a significant boost in the defense business, while the Oil & Gas and Agri sectors experienced a decline in comparison to the previous year.
Despite a decline in the stock price, Bharat Forge declared an interim dividend of Rs 2.5 per share and approved raising funds of Rs 500 crore through various debt instruments. Additionally, the board re-appointed Dipak Mane as the Non-Executive Independent Director for the next five years.
EBITDA surged by 30.9 percent to Rs 645 crore, with EBITDA margins expanding to 28.5 percent, driven by a favorable product mix and cost optimization focus. The balance sheet remains robust, boasting a cash reserve of Rs 1,000 crore.
In the overseas operations, Bharat Forge achieved operational improvements in the Aluminum business in Europe, with similar expectations for the US plant. The company aims to create sustained profitability in its overseas business through improvements in the aluminum and steel sectors.
Despite the impressive performance in Q3, Bharat Forge expressed caution about the future outlook. The company stated that it anticipates a slowdown in growth momentum in the fourth quarter of the fiscal year 2024 and fiscal year 2025, based on the expectation of a moderation in growth in both domestic and export markets across various industries. This projection, coupled with the cautious outlook, may have contributed to the decline in the stock price.