BHARATFORGNSEQ4 & FY'25May 9, 2025

Bharat Forge Limited

4,076words
101turns
9analyst exchanges
4executives
Management on call
Amit Kalyani
VICE CHAIRMAN & JOINT MANAGING DIRECTOR, BHARAT FORGE LIMITED
Subodh Tandale
EXECUTIVE DIRECTOR BHARAT FORGE LIMITED
Kedar Dixit
CFO, BHARAT FORGE LIMITED
S. Rajhagopalan
HEAD, INVESTOR RELATIONS, BHARAT FORGE LIMITED
Key numbers — 40 extracted
Rs.2,163 crore
or the 4th Quarter and for Full Year: We had a stable performance in the quarter with revenues of Rs.2,163 crores with the quarter-on- quarter growth of 3%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at R
3%
performance in the quarter with revenues of Rs.2,163 crores with the quarter-on- quarter growth of 3%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 2
6.7%
nues of Rs.2,163 crores with the quarter-on- quarter growth of 3%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 29.1% which is of 100 bps higher than l
Rs.629 crore
es with the quarter-on- quarter growth of 3%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 29.1% which is of 100 bps higher than last quarter. Also, in this qu
29.1%
%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 29.1% which is of 100 bps higher than last quarter. Also, in this quarter we had an exchange loss of Rs
100 bps
DA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 29.1% which is of 100 bps higher than last quarter. Also, in this quarter we had an exchange loss of Rs.12 crores and in th
Rs.12 crore
1% which is of 100 bps higher than last quarter. Also, in this quarter we had an exchange loss of Rs.12 crores and in the last quarter we had an exchange gain of Rs.20 crores. So if you adjust that, then you
Rs.20 crore
uarter we had an exchange loss of Rs.12 crores and in the last quarter we had an exchange gain of Rs.20 crores. So if you adjust that, then you will see a 100 bps margin improvement. PBT before the excepti
Rs.494 crore
adjust that, then you will see a 100 bps margin improvement. PBT before the exceptional item was Rs.494 crores which was a 4% quarter-on-quarter. On a full year basis, revenue was at Rs.8,844 crores and EBIT
4%
l see a 100 bps margin improvement. PBT before the exceptional item was Rs.494 crores which was a 4% quarter-on-quarter. On a full year basis, revenue was at Rs.8,844 crores and EBITDA was at Rs.2,5
Rs.8,844 crore
al item was Rs.494 crores which was a 4% quarter-on-quarter. On a full year basis, revenue was at Rs.8,844 crores and EBITDA was at Rs.2,524 crores with a margin of 28.5%, again a 100-basis points expansion in
Rs.2,524 crore
s a 4% quarter-on-quarter. On a full year basis, revenue was at Rs.8,844 crores and EBITDA was at Rs.2,524 crores with a margin of 28.5%, again a 100-basis points expansion in margins vis-à-vis last year. Our
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Guidance — 20 items
Kedar Dixit
opening
“For FY25 RoCE the net of cash was 18.1%.”
Kedar Dixit
opening
“In FY25, consolidated revenue was 3.6% lower at Rs.15,123 crores.”
Kedar Dixit
opening
“The CAPEX for Indian operations was Rs.750 crores in FY25.”
Kedar Dixit
opening
“We have completed the CAPEX for our overseas Greenfield projects in US for aluminum forging and we don't foresee much of investments in overseas entities for next year.”
Kedar Dixit
opening
“In FY25, European operations recorded EBITDA of Rs.96 crores while US operations narrowed their EBITDA loss to Rs.47 crores.”
On the standalone basis
opening
“I think we have had a reasonable performance in FY25 with 100 basis points margin improvement on a strong robust balance sheet.”
On the standalone basis
opening
“It has grown 4x in the past five years and we expect this to continue growing at a high pace going forward.”
In the casting space
opening
“We have now a 15%-plus EBITDA margin with a doubling of profits in FY25.”
In defense
opening
“We expect to see a 15% to 20% growth in FY26.”
In defense
opening
“In terms of E-mobility, we are now very hopeful that our products are at maturity, and we should start seeing revenue progression going forward this year, including moving towards black numbers towards the end of the second half of the year.”
Risks & concerns — 2 flagged
Again, Gunjan, it's very difficult to answer this question with the frame of the tariffs uncertainty in place.
— Amit Kalyani
So, in your opinion does that reduce the impact of tariffs at least for auto components also in the near term or that is not something that you think is substantial?
— Sameen Irani
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Q&A — 9 exchanges
Q
Yes. Hi, team. Thanks for taking my questions. My first question is just trying to understand that of course we don't know how the tariff situation is sort of eases, but at the moment, what is the sort of conversations that you're having with the customers? And just also want to be clear, is the tariff already under implementation as far as your exports to US go?
Subodh Tandale
So. Currently, as you know, the tariff applies to shipments that have left India after 5th of April. So we have time until the third week of May, number one. Number two is at this point there is a clarity that so-called the automotive tariffs that they're talking about will be applicable for the passenger car segment or like products. And the third part of it is that we are engaged with all our customers and all our customers are talking positively in terms of taking over the tariffs from our side, I mean, we won't be exposed to tariffs is what we think, but that's active discussions ongoing w
Q
Yes. Good afternoon, sir. Sir, just one clarification on the tariffs. On the non-passenger car revenues, will there be reciprocal tariffs that will be there on those? And how are the customers reacting to this -- are they going slow and waiting for the tariffs situation to settle, are you seeing some run down schedules because of that?
Amit Kalyani
I would say that we are in a holding pattern nobody knows anything that is going on right now. Okay. We are all waiting for some amount of clarity till the smoke settles. So I don't think anybody can answer these questions today. I think we just have to wait and watch. Sir, for your US operations, there was a tariff on steel and aluminum also that has come in US. So could you just help us understand what is the impact there because I see that operation has turned profitable this quarter? Yes, we are producing steel and aluminum components in the US. We buy our steel locally and we produce our
Q
Yes, hi, thanks for the opportunity. Just on tariffs, if you allow one more question, last week or I think 10-days back, there was some offset which was allowed to some of the US OEMs who are importing components. So, in your opinion does that reduce the impact of tariffs at least for auto components also in the near term or that is not something that you think is substantial?
Subodh Tandale
Yes, the offset is basically they have given a two-year plan that for the OEMs they have 25% tariff rate, the first year they can get a refund of 15% from the government, the second year they will get a refund of 10%, and in the third year it will be reviewed depending on what happens. But that's what's announced as offset. Okay. And secondly on this server and electronics thing, so this will be utilizing your KPTL investments that you have done in the capacity? Yes, we set up SMT lines and electronics manufacturing which will be used. Any broad timeline by when we could start seeing this like
Q
Sir, thank you for taking my question. So the first question is on US manufacturing operations. Now that the tariffs are in place, etc., how do you see the further scale up of this business? You've already seen good growth on a YoY, QoQ level for US manufacturing operations. What is our outlook for FY26?
Subodh Tandale
So one comment is we have been growing in the US from order book position and spread irrespective of all these tariffs. And whatever happens right now it will only help us in accelerating it. So currently I mean we can't give you numbers in that regard obviously, but we see a very strong order book and we are also ramping up our existing capacities both for steel and aluminum. So, the outlook is good. So now the focus is for us to make it happen and obviously we continue to look for more opportunities. So if I look at the turnover of roughly 30 to 100 what we did for this quarter, what would b
Q
Yes. Hi. Good afternoon, sir. Thank you for taking my question. This ATAGS order, the Rs.3,417 crores order, this is the Indian ATAGS order I believe. So is it the whole orders or could we see further increase in this number?
Amit Kalyani
This is only a phase-I order, which is 307 guns, of which we have 60%. Overall, India needs more than 1,500, close to 2,000 artillery guns. Okay. 307 guns are Rs.3,417 crores and there could be further increase there? Yes. There are multiple different kinds of guns and lots of them. Okay. And sir, when should we see the revenue for this order in the numbers of the Company? I would say Q4 onwards. Q4 this fiscal? Yes. Alright. And if we spread over how many years or quarters, if you could share that? For this order, two years. Two years beginning 4Q FY26? Yes. Alright sir. Thank you so much for
Q
Hello, sir. A very good afternoon. So, sir, my question was on the Kalyani Strategic Systems Limited. So in that how much was the domestic revenue and how much came from exports?
Amit Kalyani
So in Kalyani Strategic Systems, most of the revenue was exports and one clarification, the Rs.1,567 crores numbers what we mentioned for defense, that is only for Kalyani Strategic Systems. On a consolidated basis it's about Rs.1,700 crores. We supply components and other things to other players as well in the industry which go from Bharuch. Understood. And sir, this Kalyani Strategic number that we have said that most of this came from export. So last year, how was this ratio like domestic to export? So last year also it was exports and this year also it was exports. The domestic big orders
Q
Thank you. Just want to understand what has been the tonnage growth in India, the commercial vehicle and the passenger car because the revenue growth -?
Amit Kalyani
I think we have to stop looking at tonnage, because we are not only a forging Company. I think you have to look beyond that revenue. And we are not breaking it up that way anymore. And you had mentioned that you've opened certain new products or also clients or applications. Can you just talk a bit about that in terms of commercial vehicles and industrial and for domestic, some color on that that will be helpful, sir? Can't understand. I am sorry, you're very unclear. Means you actually won new orders, or you have actually gone deep in some relationship in the domestic market. I just want to u
Q
Just one question. On the CAPEX, if you could give an indication for next year for standalone and consol what kind of numbers to expect?
Amit Kalyani
I think roughly both put together would be in the region of Rs.500 crores next year. Okay. Alright. That is it from my side. Thank you.
Q
So, ladies and gentlemen, thank you for your time, interest and questions. I am sorry we don't have any more answers than we could answer today because things are in a flux and I think the Indian government and Indian manufacturing are cooperating to make sure that we take advantage and are in a good situation even with the United States tariff situation. India is a strong country with very good manufacturing capability and we think that we will see light at the end of this tunnel. Thanks to the leadership and let's say the way the Indian government is handling the situation on tariffs. I thin
Management
Speaking time
Amit Kalyani
36
Moderator
11
Kapil Singh
9
Subodh Tandale
7
Arvind Sharma
7
Arjun Khanna
6
Gunjan Prithyani
5
Ruchita Kadge
5
L Narayan
5
Sameen Irani
4
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Opening remarks
Amit Kalyani
Good afternoon, ladies and gentlemen, and thank you for joining us for our Year End Conference Call. I have with me our Head of Finance – Kedar Dixit, Head of Investor Relations – Rajhagopalan, and our Finance Team Members. As usual, I will have them give you an introduction and then I will take you through the Q&A.
Kedar Dixit
Good afternoon. I will take you through the standalone business highlights for the 4th Quarter and for Full Year: We had a stable performance in the quarter with revenues of Rs.2,163 crores with the quarter-on- quarter growth of 3%. Standalone EBITDA in Q4 grew by 6.7% vis-à-vis Q3 at Rs.629 crores, translating in a margin of 29.1% which is of 100 bps higher than last quarter. Also, in this quarter we had an exchange loss of Rs.12 crores and in the last quarter we had an exchange gain of Rs.20 crores. So if you adjust that, then you will see a 100 bps margin improvement. PBT before the exceptional item was Rs.494 crores which was a 4% quarter-on-quarter. On a full year basis, revenue was at Rs.8,844 crores and EBITDA was at Rs.2,524 crores with a margin of 28.5%, again a 100-basis points expansion in margins vis-à-vis last year. Our balance sheet continues to be robust with surplus funds, the net of long-term loans are at about Rs.1,336 crores. For FY25 RoCE the net of cash was 18.1%.
On the standalone basis
I think we have had a reasonable performance in FY25 with 100 basis points margin improvement on a strong robust balance sheet. Few things will stand out are the fact that the business is becoming more diversified and resilient. Over the 2019 to 2025 timeframe, industrial exports have been flat at around Rs.1,600 crores despite oil and gas declining from around Rs.1,100, Rs.1,200 crores to about Rs.400 crores. This drop has been compensated by other areas such as High horsepower and Aerospace. Aerospace is now 15% of industrial exports. It has grown 4x in the past five years and we expect this to continue growing at a high pace going forward. We are now setting up a new dedicated forging and machining facility for aerospace backed by both business wins and customer commitments, including financial commitments. You will witness one new business adding to the growth of industrial exports in the next three to four years.
Overseas
As I mentioned, we continue to evaluate all our options for the European businesses, but our aluminum business in Europe and North America is now falling in place. Already in North America, we are seeing substantial improvement. And as we see capacity utilization go up in Europe, that will also impact positively the European aluminum forging business.
In the casting space
I am very happy to report that our teams at JSA have performed exceedingly well and delivered on the promise that we felt they had during the acquisition. We have now a 15%-plus EBITDA margin with a doubling of profits in FY25. We have added a lot of new customers, and we are on a solid growth trajectory to a four-digit number shortly.
In defense
We expect to see a 15% to 20% growth in FY26. We have a strong order book. There are lots of opportunities both in India and outside. And as I mentioned, our order book is almost Rs.9,500 crores. We have many new programs that we are working on which will convert into orders in the coming years and a lot of new geographies that we will open up this year. In terms of E-mobility, we are now very hopeful that our products are at maturity, and we should start seeing revenue progression going forward this year, including moving towards black numbers towards the end of the second half of the year. In terms of M&A: We have now received the CCI approval for our American Axles India Assets Transaction. We expect to conclude this transaction by the end of June. I think this is going to be another good opportunity for us to grow our market penetration and our presence and content per vehicle going forward. The one thing that I want to mention is, due to the US tariff situation, there is a lot of
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