- Bharat Forge reported a mixed Q1 FY 2027 with revenue growth offset by weaker margins; standalone revenue rose 11.5% to ₹2,347 crore and EBITDA rose 4.5% to ₹614 crore, with margin slipping to 26.2% due to a 160-basis-point hit from higher energy prices, input costs, and logistics inflation.
- Bharat Forge shares fell 6.76% to ₹2,112 from the previous close of ₹2,265.20, and the stock is now about 8.0% below its 52-week high of ₹2,295 but far above its 52-week low of ₹1,100.50.
- Management expects its aerospace business, currently generating about ₹400 crore in revenue, to double in size over the next couple of years, while its semiconductor business targets $30-40 million in organic revenue over the same period.
- Company plans to back expansion with up to ₹2,500 crore of fresh capital, earmarked for capex growth in large engines, power generation, semiconductor components, aerospace, and defence energetics, with investments expected to be completed over the next 18 months.
- Management expects the second half of FY27 to be stronger, provided there are no fresh major geopolitical disruptions or supply-chain shocks.
- Management attributed the quarter's challenges to manpower disruption linked to geopolitical tensions, labor movement, and supply chain strain, but argued most issues were temporary; Amit Kalyani, vice chairman and joint managing director, said the quarter was challenged by unexpected labor disruption and other operating issues.
- The balance sheet remained strong with net debt to equity at 0.45, and the company secured new orders across businesses: forging ₹522 crore, defense ₹681 crore, and ferrous casting around ₹150 crore during the quarter, with defense order book at ₹11,196 crore.
Bharat Forge reported a net loss of ₹90 crore in Q1 FY 2027, as margin pressures from rising energy prices and geopolitical disruptions weighed heavily on its performance. The company's shares fell 6.76% to ₹2,112, reflecting investor concerns over profitability.459
Despite the loss, Bharat Forge's revenue increased by 11.5% year-over-year, reaching ₹2,347 crore. However, the standalone EBITDA margin declined to 26.2%, impacted by a 160-basis-point hit from higher input costs and logistics inflation. The company noted that on a normalized basis, the margin would have been around 28%.123
Amit Kalyani, Vice-Chairman and Joint MD, acknowledged the challenges faced during the quarter, citing unexpected labor disruptions and supply chain strains. He stated, “We are starting to see many of our businesses hit their stride,” indicating optimism for future growth.
Looking ahead, management expects Q2 to improve but cautioned against a full reversal of cost pressures. They anticipate FY 2027 to be a “very good year,” with FY 2028 projected to be “remarkably strong” if current trends continue. The company is also focusing on expanding its aerospace and semiconductor businesses, targeting ₹400 crore in aerospace revenue and $30-40 million in semiconductor revenue over the next two years.6
The balance sheet remains robust, with a net debt to equity ratio of 0.45. The outstanding order book in defense stands at ₹11,196 crore as of the end of the quarter, reflecting strong demand despite current challenges.121314
“Management expects aerospace revenue to double from ₹400 crore in two years and semiconductor components to reach $30-40 million, backed by up to ₹2,500 crore in fresh capital. The company also won its largest naval order for Marine Gas Turbine Generators for Kolkata-class ships, with defense order book at ₹11,196 crore.”
