Bharat Forge shares increased 8.31% to Rs 797.6 in intraday trade on Friday as the company announced satisfactory performance for the June quarter (Q1FY23), with standalone revenue up 5.1% sequentially at Rs 1,759 crore.
In the last month, the stock has outpaced the market by 25%, compared to a 10% increase in the S&P BSE Sensex. However, during the previous year, the stock has underperformed, dropping 4% against an 8% rise in the benchmark index. On November 10, 2021, the stock reached a record high of Rs 848.
International operations drove revenue growth during the quarter, increasing 11.5% quarter on quarter (QoQ) to Rs 1,048 crore. Domestic revenues fell 3.7% year on year to Rs 690 crore, owing to a drop in MHCV production during the quarter.
Despite a steep increase in energy costs, the standalone earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins were at 26.1% in Q1FY23, a slight gain of 40 basis points from Q4FY22. The reported standalone profit after tax was Rs 243.7 crore, a 7% decrease year on year.
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During the quarter, the Indian operations acquired a new business in the automotive and industrial sectors valued at about Rs 350 crore. Despite high input prices and adverse market circumstances, the European operations achieved a consistent result on a consolidated basis.
“The new Greenfield Aluminium Forging facility in North America is still in a ramp-up phase and operating at low utilization levels which has adversely impacted the overall quarterly profitability. We expect this business to turn around in the second half of the fiscal,” the management said.