Bharat Forge Q2 Results: Profit Misses Estimates On High Costs

Bharat Forge Ltd.’s second-quarter profit missed estimates as margins contracted sharply due to elevated raw material, finance and employee costs.

The company’s consolidated net profit fell 48% year-on-year to Rs 141.6 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 256.8-crore consensus estimate of analysts tracked by Bloomberg.

Bharat Forge Q2 FY23 Consolidated (YoY):

• Revenue rose 29% to Rs 3,076.4 crore, against a forecast of Rs 2,894.4 crore.

• Ebitda down 15% at Rs 432 crore, compared with an estimate of Rs 497.9 crore.

• Ebitda margin at 14% versus 21.4% last year. Analysts had projected it at 17.2%.

The sharp contraction in operating margin came amid 39% growth in total expenses, compared with a 29% increase in revenues.

The raw material costs jumped 36% to Rs 1,446 crore. Finance costs more than doubled to Rs 52.6 crore, while employee bill rose nearly 26% to Rs 400.6 crore.

Shares of Bharat Forge were trading 3.6% lower as of 1.21 p.m., against a 0.1% fall in the benchmark Nifty 50.