Bharat Forge Q2 FY27 Result: Net profit drops 7% YoY; board approves additional investment in Kalyani Strategic Systems

The auto components major’s revenue from operations increased 21% year-on-year (YoY) for the quarter at ₹4,870 crore as compared to ₹4,032 crore in Q2 FY26.

On the operation level, the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter were at ₹768 crore, marking a 6% annual growth from ₹726 crore.

The EBITDA margin for Q2 FY27 stood at 15.77%, in contrast to 18% YoY.

Bharat Forge’s Indian manufacturing revenue increased 24.6% YoY to ₹3,422 crore in the second quarter, while EBITDA rose 12.3% to ₹759 crore.

On a standalone basis, the revenue surged 29.8% yearly to ₹2,526.4 crore in Q2 FY27, supported by a rebound in North American truck demand and strong domestic commercial vehicle (CV) demand, Bharat Forge said in the investors’ presentation. EBITDA rose 20.2% to ₹654.6 crore, while the EBITDA margin stood at 25.9%, down 30 basis points quarter-on-quarter due to higher energy, freight and manufacturing costs.

By the end of the half-year of the current fiscal year (H1 FY27), the firm’s defence order book stood at ₹10,960 crore. Its new orders were worth ₹2,107 crore, with defence order at ₹681 crore.

In Q2 FY27, Bharat Forge’s passenger car exports witnessed a strong quarter YoY driven by broad-based growth across North America and Europe. In the commercial vehicle segment, inventory restocking, a rebound in North American truck volumes, and modest volume and market share gains in Europe drove the strong performance.

The company also said that barring a weak quarter in the construction & mining sector, the industrial segment saw steady annual growth driven primarily by robust performance in oil & gas and a stable growth in new business verticals.

Additional investment in Kalyani Strategic Systems

Along with the earnings, Bharat Forge’s board of directors has also approved a further investment of ₹291 crore in Kalyani Strategic Systems, a wholly owned subsidiary of the company, at fair value, in one or more tranches.

The proposed investment will be funded from the proceeds of qualified institutional placement (QIP) undertaken by the company, Bharat Forge said.

The investment will be completed on or before March 31, 2027. Kalyani Strategic Systems is an Indian public limited company incorporated on December 20, 2010, headquartered in Pune. It has a presence in India and Spain.

Outlook for H2 FY27

“We have received Bulk Production Clearance (BPC) for the ATAGS order with revenue recognition from Q1 FY28. Our ₹2,000+ Crore capex programme across Automotive, Aerospace, Defence (including the new Energetics plant), and Data Center & Semiconductor components will come online in phases over 12-18 months, driving growth from FY29 and shifting our mix over the medium term,” said B.N. Kalyani, Chairman & Managing Director, Bharat Forge.

Kalyani added that the company expects revenue growth of 20-25% in its Indian manufacturing business in FY27, supported by sustained demand across sectors. He said that ATAGS manufacturing is scheduled to begin in FY27, with revenue recognition starting in early FY28.

He also said the company is conducting a strategic review of its overseas business, where performance remains below expectations, to determine the best way forward.

Following the earnings, Bharat Forge shares were trading at ₹1,801.70 apiece on the National Stock Exchange, falling 0.61%.