Q1 2027 Bharat Forge Ltd Earnings Call Transcript
Key Points
- Standalone revenue grew 11.5% YoY to INR 2,347 crore, with EBITDA margin at 26.2% despite cost headwinds.
- Defense order book remains robust at INR 11,196 crore, with a major breakthrough in marine systems (gas turbine engines for Kolkata-class ships).
- Strong performance in Indian subsidiaries, including Kalyani Strategic Systems (defense) and JS Auto Cast, with revenue and EBITDA up over 30% YoY.
- New orders secured across segments: forging (INR 522 crore), defense (INR 681 crore), and ferrous casting (INR 150 crore).
- Outlook remains strong with expected margin recovery in Q2, driven by price hikes and normalization of US operations.
- Aerospace business expected to double in 2-3 years, with new ring mill in Baramati to boost production.
- Fundraise of up to INR 2,500 crore for growth CapEx in high-margin sectors like aerospace, semiconductors, and power gen.
- EBITDA margin impacted by 160 bps due to escalation in energy prices, input costs, and logistics.
- US operations reported EBITDA loss due to breakdown of steel plant equipment, impacting overall consolidated margins.
- Manpower and fuel supply challenges from the Iran war and LPG crisis affected production schedules and sub-suppliers.
- Restructuring of Bharat Forge CDP (German steel business) is ongoing, with a provision of INR 30 crore and cash outflow expected post 12 months.
- Defense business margins are volatile, with steady-state target of 22-23% but quarterly fluctuations.
- US aluminum tariff (50% on Canadian imports) poses a challenge to achieving targeted margins in the US aluminum business.
- Approval for ATAGS deliveries is delayed due to procedural issues, impacting defense revenue timing.
Ladies and gentlemen, good day and welcome to the Q1 F 27 earnings conference call, hosted by Barak For Limited.
As a reminder, all participant lines will remain in the listen-only mode.
And there will be enough to ask questions after the management opening remarks.
Should you need assistance during the conference call, please signal the operator by pressing on your touchstone telephone.
Please note that this conference is being recorded.
I will now hand the conference over to Mr.
Amy, Vice-Chairman, and John Managing Director, Bharat F Limited.
Thank you.
And over to you, sir.
Good afternoon and thank you for participating in our
Analyst call.
I have with me a.
Kedar Dikshit, Raj Gopal, Subo Tandley and Amitab and Chennai.
So we're here to answer your questions, and I'll first request Kea to take you through the commentary of the quarter and then we
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