Bharat Forge Q1 Net Profit Dips, Approves ₹25,000 Cr Fundraise

Document Overview

Board Meeting Outcomes

The Board of Directors meeting held on August 10, 2026 (11:30 AM to 1:45 PM IST) approved:

1. Unaudited Financial Results for quarter ended June 30, 2026 (Standalone & Consolidated) along with Limited Review Report from statutory auditors BSR & Co. LLP

2. Fundraising Approval for up to ₹25,000 million (Rupees Twenty-Five Thousand Million) by way of:

Equity shares, debt issue, or securities convertible into equity shares
Methods: further public offer, rights issue, ADR/GDR/FCCB, QIP, preferential issue or any other permitted method
Subject to shareholder and regulatory approvals
Investment Committee – Strategic Business delegated powers to decide structure, form, price, timing, terms and conditions

3. Incorporation of Malaysian Subsidiary for semiconductor and allied activities, subject to necessary approvals and formalities

Standalone Financial Results (₹ in Million)

Income Statement Highlights

Revenue from operations: ₹23,474.16 (Q1 FY27) vs ₹21,047.07 (Q1 FY26) - 11.5% YoY growth
Total income: ₹23,816.70 (Q1 FY27) vs ₹21,469.00 (Q1 FY26)
Profit before exceptional items and tax: ₹4,617.55 (Q1 FY27) vs ₹4,492.75 (Q1 FY26)
Exceptional items (loss): ₹(244.91) million primarily related to German subsidiary restructuring and VRS expenses
Profit before tax: ₹4,372.64 (Q1 FY27) vs ₹4,492.75 (Q1 FY26)
Net profit: ₹3,213.99 (Q1 FY27) vs ₹3,385.21 (Q1 FY26) - 5.1% decline
EPS: ₹6.72 (Q1 FY27) vs ₹7.08 (Q1 FY26)

Expense Breakdown

Cost of raw materials: ₹9,564.53 million
Employee benefits: ₹1,858.93 million
Finance costs: ₹431.92 million
Depreciation: ₹1,150.02 million
Other expenses: ₹6,570.54 million

Capital Structure

Equity share capital: ₹956.27 million (Face value ₹2 each)
Other equity: ₹108,926.08 million (as of March 31, 2026)

Consolidated Financial Results (₹ in Million)

Income Statement Highlights

Revenue from operations: ₹46,399.41 (Q1 FY27) vs ₹39,087.49 (Q1 FY26) - 18.7% YoY growth
Profit before exceptional items and tax: ₹4,024.49 (Q1 FY27) vs ₹4,109.89 (Q1 FY26)
Exceptional items (loss): ₹(3,580.05) million primarily related to German subsidiary restructuring
Profit before tax: ₹444.44 (Q1 FY27) vs ₹4,109.89 (Q1 FY26)
Net loss: ₹(898.88) million (Q1 FY27) vs net profit of ₹2,838.70 million (Q1 FY26)
EPS: ₹(1.88) (Q1 FY27) vs ₹5.93 (Q1 FY26)
Total comprehensive loss: ₹(376.38) million attributable to owners

Segment Performance Analysis (Consolidated)

Revenue by Segment (Q1 FY27)

Forgings: ₹38,311.49 million (82.6% of total)
Defence: ₹4,956.84 million (10.7% of total)
Others: ₹6,278.63 million (13.5% of total)
Inter-segment revenue elimination: ₹3,147.55 million

Segment Results (Q1 FY27)

Forgings profit: ₹4,349.82 million
Defence profit: ₹377.40 million
Others profit: ₹269.52 million
Total segment profit before interest, tax: ₹4,996.74 million

Segment Assets (as of June 30, 2026)

Total assets: ₹227,989.18 million
Forgings: ₹149,716.92 million (65.7%)
Defence: ₹24,199.94 million (10.6%)
Others: ₹25,696.36 million (11.3%)
Unallocable assets: ₹35,066.30 million (15.4%)

Exceptional Items Details

Current Quarter (Q1 FY27)

BF CDP GmbH restructuring: ₹235.99 million (standalone), ₹266.92 million (consolidated) incidental expenses
BF CDP social plan provision: ₹3,304.21 million restructuring provision in consolidated results
VRS expense: ₹8.92 million in both standalone and consolidated results

Previous Period (FY 2025-26)

KPTL impairment: ₹4,996.50 million (year), ₹4,504.00 million (Q4) in standalone
Electric mobility business impairment: ₹404.99 million in consolidated results
BF CDP restructuring: ₹425.64 million incidental expenses, ₹156.65 million redundancy provision
New labour code impact: ₹487.26 million (standalone), ₹557.15 million (consolidated)
Defence business transfer gain: ₹413.55 million (no consolidated impact)

Subsidiary and Investment Updates

Acquisitions Completed

BF Industrial Solutions Limited acquired 90% stake in RS Aerostructures Limited for ₹36.00 million
Company acquired 30% stake in Fortuna Engineering Private Limited for ₹1,296.00 million

Joint Venture Transaction

Kalyani Powertrain Limited executed Definitive Agreement (July 22, 2026) to sell entire 50% equity stake in REFU Drive GmbH to REFU Elektronik GmbH for EUR 12,500.00

Subsidiary Structure

The consolidated results include 42 entities across subsidiaries, associates and joint ventures globally, with significant operations in Germany, USA, Sweden, France, and India.

Financial Ratios

Standalone Ratios (Q1 FY27)

Debt Service Coverage Ratio: 4.67 times
Debtors Turnover Ratio: 0.55 times
Inventory Turnover: 0.57 times
Debt Equity Ratio: 0.34 times
Current Ratio: 1.60 times
Net Worth: ₹113,874.62 million

Consolidated Ratios (Q1 FY27)

Operating Margin: 15.05%
Net Profit Margin: -1.94%
Interest Service Coverage Ratio: 8.11 times
Debt Service Coverage Ratio: 3.74 times
Debt Equity Ratio: 0.73 times
Current Ratio: 1.18 times
Net Worth: ₹95,423.21 million

Auditor Review

BSR & Co. LLP issued limited review reports for both standalone and consolidated financial results, noting:

Figures for March 31, 2026 are derived between audited annual figures and reviewed nine-month figures
Three subsidiaries representing ₹9,896 million revenue were reviewed by other auditors
25 subsidiaries and 8 associates/joint ventures not reviewed due to immateriality
No material misstatements identified in the financial results