Defence Revenue Surges 67%, subsidiary JS Auto Revenue Up 32% in Q2
14 Nov 2024 | 2328 Views | By Arunima Pal
Bharat Forge Ltd reported a consolidated revenue of ₹3,689 crore in the second quarter of the financial year 2025, a 2.3% decrease year-on-year. The company reasoned European market challenges as one of the causes for this fall. The company’s net profit increased 13.2% to 243.2 crore from Rs 214.8 crore ...
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Bharat Forge Ltd reported a consolidated revenue of ₹3,689 crore in the second quarter of the financial year 2025, a 2.3% decrease year-on-year. The company reasoned European market challenges as one of the causes for this fall. The company’s net profit increased 13.2% to 243.2 crore from Rs 214.8 crore a year ago.
EBITDA reached ₹690 crore, marking a 10.8% YoY growth. This positive trajectory in EBITDA indicates an improvement in operating efficiency, resulting in a significant margin expansion from 16.5% to 18.7%.
Order Book Strength and Segment Performance
BFL reported new order wins worth ₹1,207 crore across defense, castings, and the core forging business. These contracts brought the total H1FY25 order wins to ₹2,216 crore, with two-thirds originating from the defense sector.
Notably, the defense segment generated revenue of ₹509 crore in Q2FY25, which is a remarkable 67% YoY increase. New defense orders valued at ₹642 crore contributed to BFL’s executable order book of ₹5,905 crore as of September 30, positioning BFL for future revenue growth.
Automotive Sector
The automotive business faced headwinds in certain segments while showing resilience in others. BFL’s domestic commercial vehicle (CV) segment softened YoY as sluggish demand affected sales. Nonetheless, the company expects favorable governmental capital expenditure (capex) initiatives and an increase in private sector construction to bolster the domestic CV segment in the long term.
Meanwhile, the passenger vehicle (PV) segment demonstrated slight YoY recovery, driven by BFL’s strategic focus on partnerships and premiumization trends, which align with consumer preferences for higher-quality, safer vehicles.
International Operations
Internationally, BFL's overseas operations reported sales of ₹1,145 crore and EBITDA of ₹16 crore. Economic stagnation in Europe continues to delay the recovery of BFL's European operations, especially in the automotive sector.
However, export demand from North America reflected resilience, particularly in the CV export business, which showed a YoY improvement of 14%. BFL remains cautiously optimistic about further stabilization in H2 FY25, focusing on revenue and profitability improvements across both Indian and international subsidiaries.
JS Auto Segment Growth
Subsidiary JS Auto registered a 32% revenue growth YoY, reaching ₹165 crore, along with a 60% EBITDA increase to ₹20 crore. The subsidiary’s strong performance aligns with the broader trend of supply chain shifts toward India, an advantage BFL aims to capitalize on. JS Auto’s H1 FY25 order wins totaled ₹173 crore.
Industrial and Infrastructure Segment
The industrial segment showed robust growth, with a 26% YoY increase to ₹6,392 million, driven by successful execution of defense orders and sustained demand in the construction, mining, and power generation industries. India's capex on power infrastructure and ongoing capacity expansions bode well for this segment’s long-term outlook, the company said.
E-Mobility and Technological Advancements
Despite its small scale in BFL’s overall business, the e-mobility segment’s financial losses have significantly decreased YoY. BFL’s investment in advanced technologies and capacity utilization improvements have contributed to an 18.9% YoY increase in profit before tax (PBT), attributed to enhanced performance in subsidiaries like KSSL and the reduced e-mobility losses.