Bharat Forge shares slump 5% on weak Q3; stock down 30% in 6 months

Bharat Forge shares have been on a steep declining trend over the past six months

Shares of Bharat Forge declined over 5 percent to Rs 1,047 apiece on February 13 after the company registered weak third quarter (Q3FY25) performance.

The stock has been on a steep decline over the past six months, shedding more than 30 percent, significantly underperforming the benchmark Nifty 50 index, which has dropped by 4 percent in the same period.

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Bharat Forge reported 16.4 percent year-on-year (YoY) drop in net profit to Rs 212 crore in Q3FY25 while revenue from operations fell 7.4 percent YoY to Rs 2,095 crore. At the operating level, EBITDA declined 8 percent YoY to Rs 609 crore and EBITDA margin contracted by 20 basis points (bps) YoY to 29.1 percent.

The board declared an interim dividend of Rs 2.50 per equity share of face value of Rs 2 each. The interim dividend will be paid on or before, March 12, with February 18 fixed as the record date.

Management attributed the weak performance to sluggish economic conditions in the EU, which weighed on European operations and exports to the region. Additionally, the inherent volatility in the defence business impacted quarterly numbers.

On the bright side, Bharat Forge Group secured new orders worth Rs 830 crore across various business verticals in Q3FY25. The company’s defence segment generated revenue of Rs 337 crore in the quarter, while fresh order wins of ₹97 crore pushed the executable order book to Rs 5,706 crore as of December 31.

BN Kalyani, Chairman & Managing Director, acknowledged the challenges, telling CNBC-TV18 that this was the first time in the company's history they had seen such a weak quarter. However, he remains optimistic about the growth potential in the defence sector, forecasting a revenue surge to Rs 2,200 crore in FY26. "Defence is a lumpy business, but annual growth is expected to remain in double digits. The opportunity in this sector will continue to be strong," he added.

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