Bharat Forge Shares Jump Over 3% On Positive Q2FY24 Earning Updates, Profit Jumps 29%

The share price of Bharat Forge Ltd gained 3.40% at Rs 1065.60 per share at 1:51 pm IST on Monday after the company announced its results for the quarter and half year ending September 30, 2023.

In Q2FY24, the company's profit after tax (PAT) grew 29% year-on-year (YoY) at Rs 3,460 crore. Meanwhile, compared to the previous quarter (Q1 FY24), the company's PAT jumped 11.1% higher in the second quarter.

According to the company, during the quarter, the company registered a strong performance across segments & geographies, with robust YoY growth of 20.7% in revenues and 29.3% in profitability. The firm's revenue growth was driven by a 21% growth in exports and a 21% growth in domestic revenue.

EBITDA margins at 27.4% expanded by 310 bps driven by operating leverage and a sharp focus on cost control. The strong financial performance and debt reduction of Rs 307 crores resulted in ROCE (net-of-cash) inching closer to the 20% mark.

The results showed that passenger Vehicles have been a standout sector for the company over the past few quarters and it continues to rise driven by market share gains, increasing value addition and order wins from newer geographies & customers. "Today this sector accounts for almost 25% of our exports and will continue to be a key contributor to the growth of the group," said the company in an exchange filing.

The defense business performed well in terms of execution and order wins. During the quarter, the company's defense vertical, KSSL secured new business worth Rs 1,100 Crores taking the executable order book to Rs 3,000 Cores, over the coming 24 months.

Commenting on the results, Chairman and Managing Director BN Kalyani said, "Barring any untoward global disturbances which may impact demand sentiment, we expect the momentum in our businesses to continue in H2 FY24 performance along with strong cash flow generation."