Bharat Forge Ltd Q1 FY23 Result Updates.
Standalone revenue and EBITDA witnessed steady growth on a sequential basis.

Bharat Forge reported a consolidated net profit of Rs 160.37 crores as compared to Rs.152.74 crores in June 2021 and Rs. 231.85 crores in the March quarter.
Revenue from operations stood at Rs. 2851.46 crores from Rs. 2107.68 crores.
The total expenses during the June quarter were Rs. 2643.95 crores as compared to Rs. 1874.24 in June 21.
At a consolidated level, the European operations have delivered a stable performance as per plan, inspite of high input prices and weak market conditions.

According to Bharat Forge 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.

The company’s standalone performance in Q1 FY23 was steady with revenue and EBITDA witnessing growth on a sequential basis. Topline grew by 5.1% to Rs 17,594 million while EBITDA grew by 6.8% to Rs 4,600 million. Export revenues at Rs 10,475 million and PV export revenues at Rs 1,942 million are at an all time high.
Standalone revenues at Rs 17,594 million in Q1FY23 grew by 5.10% as compared to Q4 FY22 on back of 11.5% growth in Export revenues. Domestic revenues declined by 3.7% due to decline in MHCV production during the quarter. EBITDA margins at 26.1% in the current quarter is a marginal improvement of 40 bps as compared to Q4 FY22 despite a sharp increase in energy cost. PBT before Exchange gain/ (loss) of Rs 3,532 million in Q1 FY23 as against Rs 3,520 million in Q4 FY22.

India automotive business witnessed a sequential decline in revenue in line with the underlying market drop.

MHCV & PV production during the quarter declined by 10% & 4% respectively. In line with the underlying market decline, BFL’s revenues into these segments also witnessed sequential decline. India automotive business witnessed a sequential decline in revenue in line with the underlying market drop as production of medium and heavy commercial vehicles and passenger vehicles in the industry fell.
However, automotive export revenue grew, driven by both commercial and passenger vehicle segments, adding in Europe, the geo-political crisis impacted overall demand and supply chain. The Indian operations secured new business worth around Rs 350 crore across automotive and industrial applications during the period.
The India industrial business continues to display stable performance with the segment registering growth on a YoY basis while witnessing a marginal dip compared to the previous quarter.

The international automotive export revenues has witnessed growth on both QoQ & YoY basis across Commercial & Passenger Vehicle segments. Revenues from the CV segment has grown by 13.5% sequentially while the PV segment revenues have grown by 13.8% sequentially. PV revenues at Rs 1,942 million. Heavy Truck registration is marginally up while the Passenger Vehicle segment is down 14%. The geo-political crisis has had an impact on overall demand and on the supply chain.
The international industrial segment has witnessed growth on both Sequential and YoY basis driven by growth in key sectors.
The new 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 shares of Bharat Forge Ltd are trading at Rs. 790.60, up by 7.43%.

Valuations:

The return on equity (ROE) is 15.4% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 38.3. The return on capital employed (ROCE) for the company is 11.5%. The price to book value Bharat Forge Ltd is 5.60. The EV/EBITDA is 19.6. EPS for the quarter is Rs. 23.5.