Bharat Forge slips into Rs 90 crore loss in Q1
Mumbai, Aug 10
Bharat Forge Limited on Monday reported a consolidated net loss of Rs 90 crore in the June quarter, compared with a Rs 284 crore profit a year ago, after booking a one-time exceptional loss linked to restructuring at its German subsidiary.
The Pune-based engineering major reported consolidated revenue from operations of Rs 4,640 crore during the quarter, up 18.7 per cent from Rs 3,909 crore a year earlier, according to its stock exchange filing.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 5.5 per cent year-on-year to Rs 710 crore from Rs 673 crore.
However, operating margins narrowed during the period. EBITDA margin stood at 15.3 per cent compared with 17.2 per cent in the year-ago quarter, while the company's operating margin declined to about 15.05 per cent from 17.13 per cent.
The sharp decline in the bottom line was largely driven by restructuring costs at Bharat Forge CDP GmbH (BF CDP), the company's German subsidiary.
Bharat Forge said the unit continues to face adverse market conditions and structural cost disadvantages, prompting management to initiate restructuring measures, as per its regulatory filing.
As part of the process, BF CDP reached an in-principle understanding with its Works Council for implementing a social plan.
This resulted in the company recording incidental restructuring expenses of Rs 26.7 crore and a restructuring provision of Rs 330.4 crore during the quarter.
In addition to the German restructuring-related charges, Bharat Forge also booked an expense of Rs 8.9 crore towards a voluntary retirement scheme during the period.
Bharat Forge's consolidated operations are organized into three reporting segments: Forgings, Defence and Others.
The Forgings business includes forged products and machined components serving the automotive and industrial sectors, while the Defence segment comprises products and solutions catering to defence-related activities.
The company's board approved the consolidated financial results on August 10. It also cleared a proposal to raise funds through the issuance of equity or debt-linked securities, subject to shareholder and regulatory approvals.
— IANS
Reader Comments
The defence segment is the real hope for Bharat Forge. With Make in India pushing indigenous manufacturing, this could be a temporary setback. But margins shrinking to 15% from 17% is a bit concerning, no?🤔
My father has been a Bharat Forge shareholder for 15 years. He says such restructuring is painful but necessary for long-term competitiveness. The German plant was bleeding for years. Better to fix it now than let it drag forever.
As someone who follows global auto suppliers, I see this as a necessary strategic move. European operations are facing higher energy costs and labor constraints. The ₹330 crore provision shows management isn't avoiding hard decisions. Good focus on core business.
The voluntary retirement scheme and restructuring at German subsidiary - these are signs of a company adapting to global changes. I hope the management is transparent with employees. Workers' lives matter too, not just shareholder returns.
Raising funds through equity/debt is a red flag for me. Dilution of shares is never good news for small investors. But if the money goes into defence and high-margin products, maybe it's worth it. Need more clarity from management.
I remember when Kalyani group was the pride of Maharashtra's manufacturing sector. This is tough to see, but even Tata Steel went
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