Bharat Forge posts a net profit of $20 million in Q1 FY23 despite underperformance from the North American aluminium forging facility

On 11th August 2022, during a regulatory filing, Bharat Forge, the Indian multinational auto component manufacturer, reported a consolidated net profit of INR 160.37 crore ($20.12 million) for Q1 FY23. However, the company posted a consolidated net profit of (INR 152.75 crore ($19.16 million) in the same quarter previous fiscal.

Moreover, the consolidated revenue from operations during the period under review was 2,851.46 crores, compared to 2,107.68 crores a year ago.

Under review, it generated consolidated revenue of Rs 2,851.46 crore. During the year-ago period, it was Rs 2,107.68 crore. Bharat Forge aligned the accounting periods of all subsidiaries, associates, and joint ventures to make the group's operating performance more transparent.

BN Kalyani, the Chairman and Managing Director of Bharat Forge, said, "At a consolidated level, the European operations have delivered a stable performance as per plan, despite high input prices and weak market conditions."

"The new greenfield aluminium forging facility in North America is still ramping up and operating at low utilisation levels, adversely impacting quarterly profitability. We expect this business to turn around in the second half of the fiscal."

As the industry's production of medium and heavy commercial vehicles and passenger vehicles declined, Bharat Forge's India automotive business experienced a sequential decline in revenue.

In regards to the Outlook of the company, the Chairman stated, "Looking ahead into Q2 FY23, we expect stable performance across both the domestic and export markets despite uncertainty arising from the macroeconomic headwinds caused by monetary tightening."

Although automotive export revenue grew in both commercial and passenger vehicle segments, the geopolitical crisis in Europe adversely affected the overall supply chain and demand.

The company stated, "The impact of high energy prices across Europe and monetary tightening by the central bank will be keenly monitored as they may potentially provide opportunities for new business wins."