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Bharat Forge shares crashed around 7% after the company slipped into a loss in the June quarter, even as revenue continued to grow.
Note: the company took around ₹358 crore of exceptional charges during the quarter because of multiple one-time events.
One-offs are unusual expenses that don't normally happen every quarter but can temporarily pull down profits.
The numbers:
- Net loss: ₹90 crore vs ₹284 crore profit last year
- Revenue: ₹4,640 crore, up 18.7% YoY
- EBITDA (operating profit): ₹709.4 crore vs ₹670 crore
- Margin: 15.29% vs around 17% last year
What is management saying: for its Indian manufacturing business, Bharat Forge expects 20-25% growth in FY27. The company is seeing growth to be stronger during the second half of the year.
Defence, aerospace, data centres and semiconductors are where a lot of new money is going.
Bharat Forge plans to invest around ₹1,800 crore over the next 12-18 months to build dedicated forging and machining facilities for these newer businesses. This includes an energetics facility in Andhra Pradesh. These factories won't contribute meaningfully immediately, but management expects them to generate additional revenue once they become operational.
This strategy isn't entirely new. Management had already identified aerospace and defence as major growth engines entering FY27, while flagging profitability at some overseas businesses as something investors needed to watch.
Defence remains the bright spot: the order pipeline remains strong. Bharat Forge's India operations won ₹1,352 crore of new orders during Q1, of which ₹681 crore came from defence.
Its outstanding defence order book now stands at around ₹11,196 crore.
Why does an order book matter: think of it as business already lined up for the future. The company hasn't recognised all that money as revenue yet, but these orders give it visibility over what it could manufacture and deliver over the coming years.
And now, semiconductors: Bharat Forge has incorporated a new subsidiary in Malaysia to explore opportunities in semiconductors and related areas. The company hasn't disclosed many details yet and says more information will come through future exchange filings.
But overseas businesses remain a headache. This is where management's commentary becomes important.
Bharat Forge has already been restructuring parts of its EV and German forging businesses. It is now evaluating whether other overseas manufacturing operations can realistically become profitable over the medium term.
That's not a completely new problem. Its overseas operations have historically delivered much thinner margins than its Indian business. In Q4 FY26, for instance, its European operations generated an EBITDA margin of only 4%, while US operations were at around 3.5%.
More than earnings: Bharat Forge's board has also approved raising up to ₹2,500 crore through equity and debt instruments, giving the company additional flexibility as it spends heavily on new manufacturing capacity and businesses.
