Bharat Forge Q2 FY27 Results (NSE: BHARATFORG)
Signal: Margin pressure
The read
The top-line inflection is real—consolidated revenue accelerated to ₹48,699.66 million, +20.8% YoY—but earnings quality weakened: EBITDA grew only 4.6% and margin contracted 259bps to 16.7%, while PAT fell 6.9% after restructuring costs. The standalone parent was stronger, with PAT up 19.6%, leaving subsidiaries—particularly German restructuring and the softer Forgings result—as the main drag on the group.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,869.97 Cr | +20.8% | +5.0% |
| Net profit | ₹278.68 Cr | -6.9% | |
| EPS | ₹5.77 | -7.8% | |
| EBIT margin | 16.7% |
P&L walk
Revenue increased to ₹48,699.66 million, +20.8% YoY and +5.0% QoQ, but EBITDA margin contracted to 16.7% from 19.3% as employee costs, depreciation and other expenses rose faster than revenue; PAT fell 6.9% to ₹2,786.81 million after a ₹245.68 million exceptional restructuring loss.
Segments
Others was the main growth driver, with revenue up 28.0% YoY to ₹7,520.60 million and segment result up 45.8% to ₹541.98 million; Forgings remained the earnings anchor at ₹4,974.35 million of segment result but declined 2.9% YoY, while Defence result fell 63.7% QoQ to ₹136.98 million.
Key positives
- Consolidated revenue rose 20.8% YoY to ₹48,699.66 million, with Others revenue up 28.0% to ₹7,520.60 million.
- Standalone PAT increased 19.6% YoY to ₹3,708.25 million, materially outperforming consolidated PAT, which fell 6.9%.
- Consolidated PPE and CWIP rose together to ₹74,007.51 million and ₹13,426.82 million respectively, while H1 capex increased 73.8% YoY to ₹9,824.90 million.
- The QIP raised ₹20,000.00 million, of which ₹19,316.71 million remained unspent at the reporting date, supporting planned equipment, technology and subsidiary investments.
Key concerns
- Consolidated EBITDA margin contracted 259bps YoY to 16.7% even as revenue grew 20.8%, with EBITDA growth of 4.6% lagging revenue by 16.2 percentage points.
- Forgings segment result declined 2.9% YoY to ₹4,974.35 million despite 16.0% revenue growth, indicating weaker conversion of growth into segment profit.
- H1 consolidated operating cash flow fell 63.3% YoY to ₹3,662.67 million while capex rose 73.8% to ₹9,824.90 million, reflecting significant cash absorption.
- EPS fell 7.8% versus a 6.9% PAT decline as the QIP increased equity share capital to ₹977.43 million from ₹956.27 million.
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