Bharat Forge’s domestic business down in Q1

Bharat Forge’s India business, after recording a strong performance in fiscal 2022, has seen a dip in the first quarter of the current fiscal. This coincides with automotive production declining as compared to the January-March quarter.

As per a regulatory filing, its medium and heavy commercial vehicle (MHCV) business declined by 10 percent and passenger vehicles (PV) production dipped 4 percent. “In line with the underlying market decline, Bharat Forge’s revenues into these segments also witnessed decline,” the company said.

Bharat Forge, which is amongst the largest forging companies in the world secured business worth around Rs 350 crore during Q1FY23 across automotive and industrial applications in India. Exports on the other hand showed strong performance and registered growth of 13.5 percent and 13.8 percent for CV and PV respectively. 

Meanwhile, Bharat Forge’s European automotive business reported a mixed bag for the first half of CY22. Heavy truck registrations marginally went up while the PV segment fell 14 percent. “Clearly, the geo-political crisis has had an impact on overall demand and more importantly on the supply chain. The impact of high energy prices across Europe, monetary tightening by the central bank will be keenly monitored as they may potentially provide potential opportunities for new business wins,” the company added.

The company’s greenfield aluminium forging facility in North America is still in a ramp-up phase and operating at low utilisation levels which has adversely impacted the overall quarterly profitability. The company expects a turnaround in the second half of the year. 

At a consolidated level, Bharat Forge’s net profit during Q1FY23 stood at Rs160.37 crore. The company had posted a consolidated net profit of Rs 152.75 crore in the same quarter in last fiscal.

Likewise, its consolidated revenue from operations during the period under review stood at Rs2,851.46 crore as against Rs2,107.68 crore in the previous year. 

Bharat Forge said the consolidated results are not comparable with those of the last fiscal due to its alignment of accounting periods of all the subsidiaries, associates and joint ventures for a better presentation of the operating performance of the group.

Despite uncertainty arising from the macroeconomic headwinds caused by monetary tightening, the Pune-based Bharat Forge expects to post better results in Q2FY23 as domestic and export markets recover.